Occidental Petroleum Corporation (OXY)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.95 | 0.92 | 1.15 | 1.23 | 1.07 |
| Quick ratio | 0.22 | 0.16 | 0.13 | 0.33 | 0.64 |
| Cash ratio | 0.22 | 0.16 | 0.13 | 0.33 | 0.64 |
Occidental Petroleum Corporation's liquidity ratios indicate the company's ability to meet its short-term obligations.
The current ratio has shown fluctuations over the years, ranging from 1.07 in 2020 to 1.23 in 2021, but then decreasing to 0.92 in 2023. A current ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities, which was the case in 2023 and 2024.
The quick ratio, which is a more stringent measure of liquidity, has shown a declining trend from 0.64 in 2020 to 0.22 in 2024. This suggests that Occidental Petroleum may have challenges in meeting its immediate obligations using only its most liquid assets.
The cash ratio, reflecting the company's ability to cover its current liabilities using cash and cash equivalents, has also exhibited a decline over the years, with the ratio decreasing from 0.64 in 2020 to 0.22 in 2024.
Overall, the declining trend in all three liquidity ratios indicates potential liquidity challenges for Occidental Petroleum Corporation, particularly in the most recent years. Management should closely monitor the company's liquidity position and take appropriate measures to ensure it can meet its short-term obligations.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 44.52 | 40.67 | 39.58 | 37.21 | 41.82 |
The cash conversion cycle of Occidental Petroleum Corporation has shown fluctuations over the years. As of December 31, 2020, the company's cash conversion cycle stood at 41.82 days. By December 31, 2021, the cycle had decreased to 37.21 days, indicating an improvement in the company's efficiency in converting its resources into cash. However, by December 31, 2022, the cycle increased to 39.58 days, suggesting a slight slowdown in the cash conversion process.
Subsequently, by December 31, 2023, the cash conversion cycle further increased to 40.67 days, reflecting potential challenges in managing liquidity and working capital effectively. Finally, as of December 31, 2024, the cycle peaked at 44.52 days, signaling a prolonged duration for the company to convert its investments in raw materials and production into cash inflows.
Overall, the trend in Occidental Petroleum Corporation's cash conversion cycle shows both improvements and setbacks in the efficiency of its cash management and operational processes over the analyzed period, which may be further explored to assess the company's financial performance and liquidity position.