UGI Corporation (UGI)

The liquidity ratios of UGI Corporation over the past five years show fluctuations in the company's ability to meet its short-term obligations.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has varied significantly over the period. In 2024, the current ratio decreased to 0.80 from 0.90 in 2023, indicating a potential deterioration in the company's liquidity position. However, in 2022, the current ratio was relatively high at 1.56, suggesting a strong ability to meet short-term obligations. The current ratio in 2021 was 1.42, which was also favorable, while in 2020, the ratio decreased to 0.88, signaling potential liquidity concerns.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also exhibited fluctuations. The quick ratio declined to 0.47 in 2024 from 0.51 in 2023, indicating a decreased ability to cover immediate liabilities without relying on inventory. In 2022, the quick ratio was 0.68, showing a slight decrease from the previous year. The quick ratios in 2021 and 2020 were 0.81 and 0.61, respectively, indicating varying levels of liquidity over the years.

The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, also showed variability. In 2024, the cash ratio was 0.10, down from 0.11 in 2023, suggesting a decreased ability to cover short-term obligations with cash alone. The cash ratio in 2022 was 0.17, indicating a relatively stronger liquidity position. In 2021, the cash ratio decreased to 0.37, while in 2020, it was 0.19, highlighting fluctuations in the company's cash position over the years.

Overall, the liquidity ratios of UGI Corporation have shown fluctuations over the years, indicating varying levels of liquidity and the company's ability to meet its short-term obligations. Investors and stakeholders should closely monitor these ratios to assess the company's liquidity risk and financial health.

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Additional liquidity measure

The cash conversion cycle for UGI Corporation has shown variability over the past five years. In 2024, the company's cash conversion cycle was 30.52 days, slightly lower than the previous year's figure of 30.68 days. This indicates that UGI Corporation was able to manage its cash conversion more efficiently in 2024 compared to 2023.

Looking further back, in 2022, UGI Corporation's cash conversion cycle was 35.09 days, which was higher than both 2024 and 2023. This suggests that the company took longer to convert its investments in raw materials into cash in 2022.

In contrast, in 2021 and 2020, UGI Corporation's cash conversion cycles were 20.87 days and 24.14 days, respectively, both showing shorter cycles compared to the years following. This indicates that in those years, UGI Corporation was more effective in managing its inventory, receivables, and payables to optimize its cash flow.

Overall, while there were fluctuations in UGI Corporation's cash conversion cycle over the past five years, the company has demonstrated the ability to adapt and manage its working capital efficiently to convert its resources into cash effectively.