Valero Energy Corporation (VLO)

The liquidity ratios of Valero Energy Corp. indicate the company's ability to meet its short-term obligations.

1. Current Ratio:
- The current ratio has fluctuated over the past five years, ranging from 1.26 to 1.71.
- The current ratio for 2023 stands at 1.56, signaling an improvement from the previous year.
- This indicates that Valero Energy Corp. currently has $1.56 in current assets for every dollar of current liabilities, implying a sufficient cushion to cover its short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, reflects the company's ability to pay off its current liabilities without relying on inventory sales.
- Valero Energy Corp.'s quick ratio has varied from 0.88 to 1.11 in the past five years.
- The 2023 quick ratio of 1.11 shows an improvement from the prior year, suggesting that the company has $1.11 in highly liquid assets to cover each dollar of current liabilities.

3. Cash Ratio:
- The cash ratio measures the company's ability to cover its current liabilities with its cash and cash equivalents.
- Valero Energy Corp.'s cash ratio has fluctuated from 0.23 to 0.40 in the last five years.
- The 2023 cash ratio of 0.36 indicates that the company has $0.36 in cash and cash equivalents for every dollar of current liabilities.

Overall, the liquidity ratios of Valero Energy Corp. demonstrate that the company has maintained a sound liquidity position, with improvements in the current and quick ratios in 2023 compared to the previous year. While the cash ratio has also improved, it remains at a level indicating a moderate ability to cover short-term obligations with cash on hand.

---

See also:

Valero Energy Corporation Liquidity Ratios

---

Additional liquidity measure

The cash conversion cycle of Valero Energy Corp. has fluctuated over the past five years, exhibiting variations in efficiency in managing its cash flows and working capital.

The company's cash conversion cycle was at its lowest point in 2022, with only 10.20 days, indicating that the company was able to efficiently convert its investment in inventory into cash quickly. However, this efficiency slightly deteriorated in 2023, with the cycle increasing to 16.80 days, suggesting a slight delay in the conversion process.

In 2021, Valero Energy Corp. also demonstrated relatively good performance in managing its cash conversion cycle, with a cycle of 11.10 days. This indicates that the company effectively managed its inventory, accounts receivable, and accounts payable during that period.

On the other hand, in 2020, the company's cash conversion cycle significantly increased to 34.08 days, suggesting a longer time taken to convert its investments in inventory and accounts receivable into cash. This might indicate inefficiencies in managing working capital, which could have had an impact on the company's liquidity.

In 2019, the cash conversion cycle was 17.93 days, indicating that the company improved its efficiency compared to 2020 but was not as efficient as in 2021 and 2022.

Overall, the fluctuation in Valero Energy Corp.'s cash conversion cycle over the past five years indicates varying degrees of effectiveness in managing working capital and cash flows, highlighting the importance of monitoring and improving operational efficiency in these areas.