PPL Corporation (PPL)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.86 | 1.29 | 1.11 | 1.28 | 0.88 | 0.96 | 1.09 | 1.22 | 0.75 | 0.82 | 0.62 | 1.88 | 2.16 | 2.62 | 2.16 | 1.30 | 1.39 | 0.50 | 0.63 | 0.56 |
| Quick ratio | 0.40 | 0.67 | 0.53 | 0.65 | 0.46 | 0.49 | 0.55 | 0.65 | 0.37 | 0.37 | 0.32 | 1.62 | 1.81 | 2.31 | 1.99 | 0.07 | 0.11 | 0.29 | 0.40 | 0.33 |
| Cash ratio | 0.09 | 0.24 | 0.11 | 0.12 | 0.10 | 0.12 | 0.13 | 0.19 | 0.09 | 0.09 | 0.09 | 1.40 | 1.54 | 2.03 | 1.83 | 0.03 | 0.05 | 0.14 | 0.25 | 0.17 |
PPL Corporation's liquidity ratios show fluctuations over the period analyzed. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, improved from a low of 0.50 in September 2020 to a peak of 2.62 in September 2021, before stabilizing around 1.00 in subsequent periods. This indicates a stronger ability to meet short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, followed a similar trend, with a low of 0.07 in March 2021 and a high of 2.31 in September 2021. The quick ratio remained relatively stable in the range of 0.40 to 0.67 from March 2023 to September 2024.
The cash ratio, which provides insight into the company's ability to cover immediate liabilities with cash and cash equivalents, also showed notable fluctuations, peaking at 2.03 in September 2021 before declining. The ratio ranged between 0.10 and 0.24 from March 2023 to December 2024, indicating fluctuations in the company's cash position.
Overall, PPL Corporation's liquidity ratios demonstrate varying levels of short-term liquidity over the period, with improvements in some ratios indicating enhanced ability to meet immediate obligations, albeit with fluctuations in the company's cash position.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -272.96 | -147.21 | -183.21 | -151.63 | -242.24 | -266.99 | -165.02 | -203.26 | -222.13 | -158.04 | -216.84 | -147.33 | -132.13 | -123.59 | -171.06 | -176.33 | -193.90 | -242.10 | -218.57 | -229.31 |
The cash conversion cycle measures how quickly a company can convert its investments in inventory and other resources into cash flow from sales. A negative cash conversion cycle typically indicates that the company is able to generate cash quickly from its operational activities.
For PPL Corporation, the cash conversion cycle has shown fluctuations over the periods provided in the data. From March 31, 2020, to December 31, 2024, the company maintained a negative cash conversion cycle, suggesting efficiency in managing its working capital.
In Q3 2021, the cash conversion cycle decreased significantly to -123.59 days, indicating a faster conversion of investments into cash receipts. However, this trend was not sustained, as the cycle increased to -272.96 days by the end of December 31, 2024. This significant negative cycle implies that PPL Corporation may have been holding onto cash longer than necessary or facing delays in collecting receivables.
Overall, although PPL Corporation has generally maintained a negative cash conversion cycle, indicating efficient working capital management, the fluctuations seen in the data suggest potential areas for improvement in terms of optimizing cash flows and working capital efficiency.