Targa Resources Inc (TRGP)

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 0.72 0.77 0.65 0.70 0.79 0.80 0.74 0.66 0.77 0.74 0.69 0.65 0.77 0.69 0.63 0.80 0.82 1.05 0.93 1.02
Quick ratio 0.05 0.08 0.08 0.06 0.09 0.08 0.07 0.09 0.13 0.11 0.07 0.05 0.09 0.11 0.14 0.19 0.54 0.28 0.22 0.31
Cash ratio 0.05 0.08 0.08 0.06 0.09 0.08 0.07 0.09 0.13 0.11 0.07 0.05 0.09 0.11 0.14 0.19 0.54 0.28 0.22 0.31

Targa Resources Inc's liquidity ratios show a fluctuating trend over the period analyzed. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown a declining pattern from 1.02 on March 31, 2020, to 0.72 on December 31, 2024. This indicates that the company may be facing challenges in meeting its short-term financial obligations over time.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Targa Resources Inc's quick ratio has generally been lower than the current ratio, ranging from 0.05 to 0.54. This implies that the company may struggle to meet its immediate liabilities without relying on inventory in certain periods.

The cash ratio, which is the most conservative liquidity metric, focuses solely on the ability of a company to cover its current liabilities with its cash and cash equivalents. Targa Resources Inc's cash ratio has followed a similar trend to the quick ratio, highlighting potential difficulties in meeting short-term obligations based solely on available cash.

Overall, the decreasing trend in these liquidity ratios suggests that Targa Resources Inc may face challenges in managing its short-term financial commitments, potentially indicating the need for improved cash management or a review of its current asset composition to enhance liquidity.


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 9.39 11.47 8.86 6.42 11.05 15.76 8.15 3.37 8.00 9.00 4.02 2.23 3.83 9.81 2.53 2.48 11.09 16.04 13.30 5.58

The cash conversion cycle of Targa Resources Inc fluctuated over the periods provided in the data.

The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is able to quickly convert its investment in inventory into cash, which can then be reinvested or used to meet financial obligations.

Analyzing the data provided, Targa's cash conversion cycle ranged from a low of 2.23 days to a high of 16.04 days during the period. The company's cycle showed improvement in terms of efficiency during some quarters, with lower days indicating a quicker turnaround from investment to cash.

It is important to monitor the trend of the cash conversion cycle over time to assess Targa Resources' efficiency in managing its working capital and ensure that the company is effectively balancing its inventory levels, accounts receivable, and accounts payable to optimize cash flow.