WEC Energy Group Inc (WEC)

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 0.60 0.65 0.74 0.55 0.55 0.60 0.60 0.75 0.69 0.82 0.69 0.79 0.71 0.65 0.68 0.63 0.50 0.61 0.49 0.65
Quick ratio 0.00 0.08 0.08 0.02 0.01 0.01 0.01 0.01 0.42 0.57 0.49 0.57 0.48 0.49 0.54 0.48 0.43 0.62 0.00 0.01
Cash ratio 0.00 0.08 0.08 0.02 0.01 0.01 0.01 0.01 0.42 0.57 0.49 0.57 0.48 0.49 0.54 0.48 0.43 0.62 0.00 0.01

The liquidity ratios of WEC Energy Group Inc indicate the company's ability to meet its short-term obligations.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. WEC Energy Group's current ratio has fluctuated over the reporting periods, ranging from a low of 0.49 to a high of 0.82. An upward trend is observed from December 31, 2021, to December 31, 2024, where the current ratio improved from 0.71 to 0.60. However, the ratio is generally below 1, indicating that the company may have difficulty meeting its short-term obligations with its current assets.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a stricter measure of liquidity by excluding inventory from current assets. WEC Energy Group's quick ratio varies significantly, with values as low as 0.00 and as high as 0.57. There are periods, such as June 30, 2024, where the quick ratio improved to 0.08 from lower values in previous periods. However, on December 31, 2024, the ratio dropped back to 0.00. The quick ratio generally indicates a lower level of liquidity compared to the current ratio.

3. Cash Ratio: The cash ratio is the most conservative liquidity measure as it only considers cash and cash equivalents to cover current liabilities. WEC Energy Group's cash ratio shows a similar pattern to the quick ratio, with values fluctuating between 0.00 and 0.57. The company's ability to cover its short-term obligations with cash has been volatile, with some periods indicating very low levels of cash coverage.

In summary, WEC Energy Group Inc's liquidity ratios suggest that the company may face challenges in meeting its short-term obligations, especially when considering a stricter measure like the quick and cash ratios. Management should closely monitor these ratios and take appropriate actions to improve liquidity levels if necessary.

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 54.83 55.22 48.49 44.83 55.89 47.25 37.05 30.32 46.78 55.98 35.99 24.89 43.65 46.84 33.19 26.30 44.34 47.74 38.66 31.77

The cash conversion cycle of WEC Energy Group Inc has fluctuated over the periods provided. It measures the time it takes for the company to convert its investment in inventory and other inputs into cash from sales.

From March 2020 to March 2022, the company succeeded in reducing its cash conversion cycle from 31.77 days to 24.89 days, indicating an improvement in efficiency in managing its working capital. However, from June 2022 to December 2024, the cycle increased significantly, reaching a peak of 55.22 days by September 2024.

The increase in the cash conversion cycle from June 2022 could indicate potential issues in managing inventories, receivables, or payables. This can lead to higher financing costs or strained cash flows.

The company should closely monitor its working capital management practices to ensure efficient operations and optimize the cash conversion cycle to maintain healthy liquidity and profitability.