SM Energy Co (SM)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.45 | 1.17 | 1.20 | 1.34 | 1.23 | 0.99 | 0.62 | 0.72 | 0.69 | 0.30 | 0.26 | 0.30 | 0.35 | 0.73 | 1.15 | 1.63 | 0.54 | 0.63 | 0.57 | 0.41 |
| Quick ratio | 1.34 | 1.11 | 1.06 | 1.18 | 1.13 | 0.93 | 0.59 | 0.70 | 0.65 | 0.27 | 0.22 | 0.26 | 0.28 | 0.36 | 0.41 | 0.37 | 0.39 | 0.30 | 0.33 | 0.27 |
| Cash ratio | 0.97 | 0.67 | 0.67 | 0.85 | 0.74 | 0.61 | 0.26 | 0.40 | 0.37 | 0.03 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
The liquidity ratios of SM Energy Co for the specified periods indicate mixed performance in terms of its ability to meet short-term obligations with its available liquid assets.
1. Current ratio: This ratio shows a fluctuating trend over the periods, with the values ranging from 0.62 to 1.45. A current ratio above 1 indicates a company has more current assets than current liabilities to cover its short-term obligations. SM Energy Co's current ratio has shown improvement from the previous periods, but the ratio is still relatively close to 1, suggesting a moderate ability to cover its short-term debts.
2. Quick ratio: The quick ratio, also known as the acid-test ratio, includes only the most liquid assets in the numerator (cash, marketable securities, and receivables). The quick ratio values for SM Energy Co mirror those of the current ratio, indicating a similar liquidity position.
3. Cash ratio: The cash ratio measures a company's ability to cover its current liabilities with its cash and cash equivalents alone. SM Energy Co's cash ratio has varied significantly across the periods, with values ranging from 0.30 to 1.08. The company's cash ratio in the latest period improved to 1.08, suggesting a stronger ability to meet short-term obligations using only its cash resources.
In summary, while SM Energy Co's liquidity ratios have shown some improvement in the most recent period, the company still maintains a relatively moderate ability to cover its short-term liabilities. It is important for the company to continue monitoring and managing its liquidity position to ensure ongoing financial stability.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 8.67 | 52.93 | 67.67 | 61.89 | 27.68 | 47.07 | 44.28 | 43.65 | 33.86 | 62.67 | 52.06 | 59.98 | 44.96 | 69.12 | 81.70 | 134.94 | 44.08 | 109.62 | 97.09 | 67.24 |
The cash conversion cycle of SM Energy Co has shown fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 35.54 days, indicating the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales. Comparatively, in Q3 2023, the cycle increased to 39.63 days, reflecting a longer period required to complete the cash conversion process.
The trend continued in Q2 2023 with a decrease in the cash conversion cycle to 30.21 days, suggesting improved efficiency in managing inventory and collecting receivables. Q1 2023 saw a further reduction to 22.31 days, reflecting a significant enhancement in the company's ability to convert its resources into cash.
Looking back at Q4 2022 and Q3 2022, the cash conversion cycle was relatively stable around 25-26 days. However, in Q2 2022 and Q1 2022, there was a notable increase in the cycle to 35.16 days and 38.57 days, respectively, indicating a longer cash conversion period during those quarters.
Overall, the fluctuation in SM Energy Co's cash conversion cycle highlights variations in the company's efficiency in managing its working capital components. The downward trend observed in Q1 2023 suggests improved liquidity and operational effectiveness, while the fluctuations over the quarters signify the need for continuous monitoring and management of cash conversion processes.