Sempra Energy (SRE)
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 | 0.55 | 0.52 | 0.46 | 0.62 | 0.54 | 0.61 | 0.57 | 0.54 | 0.60 | 0.57 | 0.78 | 0.72 | 0.44 | 0.35 | 0.51 | 0.61 | 0.66 | 0.84 | 0.80 | 0.45 |
| Quick ratio | 0.38 | 0.23 | 0.20 | 0.31 | 0.25 | 0.37 | 0.37 | 0.34 | -1.18 | -1.54 | -1.32 | -1.02 | 0.27 | 0.19 | 1.99 | 0.35 | 2.21 | 0.63 | 0.64 | 0.30 |
| Cash ratio | 0.16 | 0.04 | 0.03 | 0.07 | 0.02 | 0.13 | 0.13 | 0.06 | -1.46 | -1.79 | -1.66 | -1.32 | 0.06 | 0.07 | 1.78 | 0.11 | 1.96 | 0.46 | 0.51 | 0.19 |
Sempra Energy's liquidity ratios, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term financial obligations.
- The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, shows a fluctuating trend over the periods provided. It ranged from a low of 0.35 to a high of 0.84 during the timeframe. A current ratio below 1 indicates that Sempra Energy may have difficulty meeting its short-term obligations with its current assets.
- The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also demonstrates variability over the periods. It ranged from negative values, suggesting potential issues meeting immediate obligations without relying on inventory, to a high of 2.21. Negative quick ratios can be concerning as it implies a lack of highly liquid assets to cover short-term liabilities.
- The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, showed a similar fluctuating pattern as the other liquidity ratios. It ranged from negative ratios to a high of 1.96. Negative cash ratios indicate a severe lack of cash on hand to cover short-term liabilities.
Overall, the liquidity ratios of Sempra Energy suggest some fluctuations and potential concerns regarding the company's ability to meet its short-term obligations with its current assets, especially during periods with lower ratios and negative quick and cash ratios. Management should monitor these ratios closely and take necessary actions to improve liquidity if needed.
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 | -147.06 | -132.60 | -129.46 | -141.12 | -178.57 | -195.30 | -156.60 | -202.09 | -167.65 | -168.06 | -125.96 | -89.04 | -140.01 | -126.13 | -115.86 | -128.89 | -128.41 | -109.76 | -144.68 | -109.60 |
The cash conversion cycle of Sempra Energy has shown fluctuations over the years based on the provided data. The cycle indicates how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
From the data, we observe that Sempra Energy has generally maintained negative cash conversion cycle days, suggesting efficient management of working capital. A negative cycle indicates that the company is able to generate cash from its operations before having to pay its suppliers.
There are periods where the cash conversion cycle has decreased, indicating improvements in efficiency in managing inventory, collecting receivables, and paying off payables. Conversely, there are periods where the cycle has increased, potentially signaling challenges in managing working capital effectively.
Overall, by monitoring the trend of the cash conversion cycle, Sempra Energy can assess its liquidity position and efficiency in managing its cash flows and working capital. The company should continue to focus on optimizing its operational processes to ensure a healthy cash conversion cycle and maintain financial stability.