Ovintiv Inc (OVV)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	42,000	3,000	5,000	195,000	10,000
Short-term investments	US$ in thousands	—	59,000	70,000	67,000	38,000
Total current liabilities	US$ in thousands	2,681,000	2,812,000	2,780,000	2,748,000	2,423,000
Cash ratio		0.02	0.02	0.03	0.10	0.02

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($42,000K + $—K) ÷ $2,681,000K
= 0.02

Based on the provided data for Ovintiv Inc's cash ratio over the years, we observe fluctuations in this liquidity metric. The cash ratio reflects the company's ability to cover its short-term obligations solely with cash and cash equivalents.

As of December 31, 2020, the cash ratio stood at 0.02, indicating that for every dollar of current liabilities, Ovintiv Inc had $0.02 in cash and cash equivalents available for immediate use. This low ratio suggests a potential liquidity challenge at that time.

By December 31, 2021, the cash ratio improved significantly to 0.10, reflecting a stronger liquidity position compared to the previous year. This increase may be attributed to various factors such as improved cash management practices or an increase in cash reserves.

However, in the following years (December 31, 2022, 2023, and 2024), the cash ratio decreased to 0.03, 0.02, and 0.02 respectively. These lower ratios indicate a potential decline in Ovintiv Inc's ability to cover its short-term obligations with available cash, which could raise concerns about its liquidity position.

Overall, the fluctuations in Ovintiv Inc's cash ratio highlight the importance of monitoring the company's liquidity position closely, as it impacts its ability to meet its short-term financial commitments. It is essential for stakeholders to analyze the company's cash management strategies and financial health to ensure sustainable operations in the long run.