Phillips 66 (PSX)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	3,323,000	6,133,000	3,147,000	2,514,000	1,614,000
Short-term investments	US$ in thousands	—	329,000	—	13,624,000	—
Total current liabilities	US$ in thousands	15,856,000	15,889,000	12,801,000	9,518,000	11,646,000
Cash ratio		0.21	0.41	0.25	1.70	0.14

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,323,000K + $—K) ÷ $15,856,000K
= 0.21

The cash ratio of Phillips 66 has fluctuated over the past five years, as indicated by the data provided. In 2023, the cash ratio stands at 0.28, showing a decrease from the previous year's 0.48. This decline suggests that the company may have less cash and cash equivalents available to cover its current liabilities in the most recent period.

Comparing the current cash ratio to that of 2021 and 2020, where it was 0.30 in both years, it indicates a further deterioration in liquidity position. However, the cash ratio has shown an improvement from the levels seen in 2019, where it was 0.18.

The trend in the cash ratio implies that Phillips 66 may be experiencing challenges in managing its liquidity effectively. A declining cash ratio could raise concerns about the company's ability to meet its short-term obligations using its available cash resources. It may be advisable for Phillips 66 to closely monitor its cash position and consider implementing strategies to improve liquidity in the future.