Phillips 66 (PSX)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | 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 | — |
| Receivables | US$ in thousands | 11,730,000 | 10,985,000 | 7,870,000 | 8,022,000 | 8,510,000 |
| Total current liabilities | US$ in thousands | 15,856,000 | 15,889,000 | 12,801,000 | 9,518,000 | 11,646,000 |
| Quick ratio | 0.95 | 1.10 | 0.86 | 2.54 | 0.87 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($3,323,000K
+ $—K
+ $11,730,000K)
÷ $15,856,000K
= 0.95
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio of 1 or higher is generally considered healthy, as it indicates that the company has enough liquid assets to cover its short-term liabilities.
Based on the data provided, Phillips 66's quick ratio has fluctuated over the past five years. In 2023, the quick ratio stands at 1.02, which indicates a slight decline compared to the previous year but still remains above the threshold of 1. This suggests that Phillips 66 has an adequate level of liquid assets to cover its short-term obligations in 2023.
Looking at the trend over the five-year period, we observe that the quick ratio was highest in 2022 at 1.17, indicating a strong ability to meet short-term obligations that year. In 2021, the quick ratio decreased to 0.88, falling below the ideal threshold of 1. However, the quick ratio improved in 2023 compared to 2021, showing a positive trend in liquidity management.
Overall, while there have been fluctuations in Phillips 66's quick ratio over the past five years, the company has generally maintained a healthy level of liquidity to cover its short-term liabilities. It is essential for investors and stakeholders to continue monitoring the quick ratio to ensure the company's financial health and ability to meet its obligations in the future.
Peer comparison
Dec 31, 2023