Ovintiv Inc (OVV)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	3,000	5,000	195,000	10,000	190,000
Short-term investments	US$ in thousands	—	70,000	67,000	38,000	41,000
Total current liabilities	US$ in thousands	2,812,000	2,780,000	2,748,000	2,423,000	2,432,000
Cash ratio		0.00	0.03	0.10	0.02	0.09

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,000K + $—K) ÷ $2,812,000K
= 0.00

The cash ratio of Ovintiv Inc has exhibited significant fluctuations over the past five years. In particular, the ratio has ranged from a low of 0.04 in 2020 to a high of 0.65 in 2019. The cash ratio represents the company's ability to cover its short-term liabilities with its cash and cash equivalents.

A higher cash ratio is generally preferred as it indicates that the company has a higher level of liquidity to meet its immediate obligations. In Ovintiv Inc's case, the cash ratio was notably high in 2019 at 0.65, suggesting a strong liquidity position that year. However, the ratio dropped considerably in 2020 to 0.04, which could raise concerns about the company's ability to cover its short-term liabilities with available cash.

The significant increase in the cash ratio to 0.59 in 2022 and further to 0.08 in 2023 indicates an improvement in the company's liquidity position compared to 2020. This rebound suggests that Ovintiv Inc may have taken steps to enhance its cash reserves and manage its short-term obligations more effectively.

Overall, while the cash ratio of Ovintiv Inc has fluctuated considerably over the past five years, the most recent data for 2023 shows an improvement in liquidity compared to the low point in 2020. Investors and stakeholders may continue to monitor this ratio to assess the company's ability to meet its short-term financial commitments.