Sempra Energy (SRE)

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 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 0.36 0.39 0.34 0.38
Quick ratio 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 2.19 0.64 0.30 0.17 0.07 0.08 0.07
Cash ratio 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 2.03 0.51 0.18 0.01 0.01 0.02 0.01

Sempra's liquidity ratios have shown varying trends over the past 8 quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has ranged from 0.54 to 0.78 during this period. Generally, a current ratio above 1 is considered healthy, indicating that a company can easily meet its short-term obligations. Sempra's current ratio has remained below 1 in all quarters, suggesting potential liquidity challenges.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Sempra's quick ratio has fluctuated between 0.49 and 0.72, with a similar trend to the current ratio. A quick ratio above 1 is typically preferred as it indicates sufficient liquid assets to cover short-term liabilities without relying on inventory.

The cash ratio, which is the most conservative liquidity measure, focuses solely on cash and cash equivalents to cover current liabilities. Sempra's cash ratio has ranged from 0.16 to 0.35, showing some volatility. A cash ratio of 0.20 or higher is generally considered adequate to meet short-term obligations.

Overall, Sempra's liquidity ratios suggest that the company may have faced challenges in meeting its short-term obligations consistently over the past 8 quarters. It would be important for Sempra to closely monitor its liquidity position and take measures to improve it if necessary to ensure financial stability and avoid potential liquidity issues in the future.

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 -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 -136.60 -117.07 -142.51 -138.82

The cash conversion cycle of Sempra has shown variability over the past eight quarters. In Q4 2023, the company's cash conversion cycle stood at -91.63 days, indicating that Sempra takes approximately 91.63 days to convert raw materials into cash inflows from sales, payments from customers, and cash outflows for operating expenses. This marked a decrease from the -84.82 days in Q3 2023.

Overall, Sempra's cash conversion cycle has been fluctuating, with periods of shorter and longer cycles. The cycle was notably shorter in Q4 2022 at -63.81 days but increased significantly in Q3 2022 to -79.56 days. It reached the lowest point in Q1 2022 at -37.01 days, indicating a more efficient conversion of cash during that quarter.

The negative values of the cash conversion cycle suggest that Sempra is able to generate cash from its operating activities before paying its suppliers, which can provide the company with a competitive advantage in managing its working capital efficiently. However, the fluctuation in the cycle indicates that there may be room for improvement in streamlining operations to enhance the efficiency of the cash conversion process over the quarters.