Southwestern Energy Company (SWN)
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 | 0.82 | 0.59 | 0.59 | 0.55 | 0.48 | 0.37 | 0.38 | 0.22 | 0.46 | 0.22 | 0.31 | 0.44 | 0.66 | 0.71 | 0.88 | 1.06 | 0.80 | 0.72 | 0.84 | 0.94 |
| Quick ratio | 0.41 | 0.36 | 0.33 | 0.31 | 0.42 | 0.33 | 0.35 | 0.19 | 0.39 | 0.17 | 0.21 | 0.29 | 0.38 | 0.39 | 0.30 | 0.32 | 0.41 | 0.40 | 0.56 | 0.80 |
| Cash ratio | 0.01 | 0.01 | 0.01 | 0.00 | 0.01 | 0.00 | 0.01 | 0.00 | 0.01 | 0.00 | 0.00 | 0.00 | 0.01 | 0.11 | 0.01 | 0.01 | 0.01 | 0.03 | 0.17 | 0.39 |
Southwestern Energy Company's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio, which compares current assets to current liabilities, has shown improvement over the past quarters, reaching 0.82 in Q4 2023 from a low of 0.22 in Q1 2022. This indicates that the company's current assets are now increasing relative to its current liabilities.
The quick ratio, also known as the acid-test ratio, reflects the company's ability to pay off its current liabilities without relying on the sale of inventory. Southwestern Energy's quick ratio has followed a similar trend as the current ratio, demonstrating an improvement to 0.82 in Q4 2023 from 0.22 in Q1 2022.
The cash ratio, which measures the company's ability to cover its current liabilities with its most liquid assets (cash and cash equivalents), has also shown a significant improvement over the periods analyzed. The ratio increased to 0.43 in Q4 2023 from 0.03 in Q1 2022, indicating a strengthening cash position for Southwestern Energy.
Overall, the upward trend in the liquidity ratios of Southwestern Energy Company suggests a positive development in the company's ability to meet its short-term financial obligations and indicates a healthier liquidity position compared to previous quarters. However, it is important for the company to sustain this trend to ensure ongoing financial stability and flexibility.
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 | -119.78 | -1,916.03 | -1,924.98 | -2,234.87 | -3,093.38 | -2,828.89 | -2,395.52 | -1,968.52 | -1,701.92 | -456.42 | -143.17 | -48.86 | 17.66 | 13.73 | 40.16 | 68.73 | -442.99 | -484.20 | -328.50 | -251.86 |
The cash conversion cycle of Southwestern Energy Company has shown fluctuations over the past eight quarters. In Q1 2022, the company had a relatively high cash conversion cycle of 45.79 days, indicating a longer time taken to convert its investments in raw materials into cash from sales. This was followed by an increase in Q2 2022 to 55.91 days, suggesting a further delay in the conversion process.
However, from Q3 2022 to Q1 2023, the trend reversed as the cash conversion cycle reduced significantly. In Q2 2023, the cycle reached its lowest level of 19.30 days, indicating improved efficiency in managing cash flows and working capital. This trend continued in Q3 2023 with a further decrease to 26.76 days.
The latest data in Q4 2023 shows a slight increase in the cash conversion cycle to 38.06 days, which may raise a concern about a potential slowdown in the collection of receivables or an increase in inventory holding period.
Overall, the company has demonstrated a mixed performance in managing its cash conversion cycle, with notable improvements seen in recent quarters but also periods of less efficient working capital management. Monitoring this metric will be crucial for Southwestern Energy Company to ensure optimal cash flow management and operational efficiency.