Sempra Energy (SRE)

Based on the data provided, Sempra's liquidity ratios have fluctuated over the past five years. In terms of the current ratio, which measures the company's ability to cover its short-term obligations with its current assets, there has been some variability. Sempra's current ratio decreased from 0.66 in 2020 to 0.44 in 2021, before increasing to 0.60 in 2022 and then dropping to 0.54 in 2023. This indicates that the company may have had some challenges in managing its short-term liquidity in 2021, but has improved somewhat since then.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, shows a similar pattern. Sempra's quick ratio decreased from 0.61 in 2020 to 0.40 in 2021, before increasing to 0.55 in 2022 and then dropping to 0.49 in 2023. This suggests that while the company has been able to meet its short-term obligations more readily than when considering inventory, there are still fluctuations in its ability to do so.

Lastly, the cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has also experienced variability. Sempra's cash ratio decreased from 0.30 in 2020 to 0.14 in 2021, before increasing to 0.20 in 2022 and then rising further to 0.21 in 2023. This indicates that the company has improved its ability to cover its short-term obligations with its readily available cash assets in recent years.

Overall, while Sempra's liquidity ratios have fluctuated, the general trend seems to suggest some improvement in the company's short-term liquidity position. However, continued monitoring of these ratios is important to ensure that the company maintains sufficient liquidity to meet its financial obligations.

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Additional liquidity measure

The cash conversion cycle of Sempra, a measure of how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has exhibited some fluctuations over the past five years.

In 2023, the cash conversion cycle stood at -91.63 days, indicating that Sempra takes approximately 91.63 days to convert its investments into cash inflows. This represents an improvement compared to the previous year, where the cycle was -63.81 days.

Looking back at the trend, the cycle was at its lowest in 2020 at -116.32 days, meaning that Sempra was able to convert its investments into cash flows more efficiently in that year. However, in 2021 and 2019, the company's cash conversion cycle was slightly higher at -92.61 days and -92.54 days, respectively.

Overall, while the company has shown variations in its cash conversion cycle over the years, the recent improvement in 2023 suggests that Sempra has been more efficient in managing its working capital and generating cash flows from its operational activities.