Williams Companies Inc (WMB)
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 | 0.50 | 0.57 | 0.45 | 0.52 | 0.77 | 0.77 | 0.49 | 0.69 | 0.78 | 0.88 | 0.65 | 0.73 | 0.91 | 0.58 | 0.70 | 0.71 | 0.62 | 0.75 | 0.96 | 0.74 |
| Quick ratio | 0.36 | 0.44 | 0.31 | 0.41 | 0.65 | 0.63 | 0.36 | -0.76 | 0.59 | 0.70 | 0.50 | 0.60 | 0.74 | 1.47 | 1.95 | 2.07 | 2.72 | 3.36 | 0.84 | 0.63 |
| Cash ratio | 0.01 | 0.16 | 0.01 | 0.13 | 0.37 | 0.38 | 0.10 | -1.14 | 0.03 | 0.17 | 0.02 | 0.14 | 0.34 | 1.07 | 1.68 | 1.77 | 2.29 | 2.82 | 0.46 | 0.19 |
Based on the provided data on Williams Companies Inc liquidity ratios, we can observe the following trends:
1. Current Ratio: Williams Companies Inc's current ratio fluctuated over the periods analyzed, ranging from a low of 0.49 as of June 30, 2023, to a high of 0.96 on June 30, 2020. The current ratio measures the company's ability to meet short-term obligations with its current assets, and a ratio below 1 indicates potential liquidity concerns. The company struggled to maintain a current ratio above 1 for most periods, indicating a potential risk in meeting its short-term financial obligations.
2. Quick Ratio: The quick ratio provides a more stringent measure of a company's liquidity by excluding inventory from current assets. Williams Companies Inc's quick ratio showed significant variability, with values ranging from -0.76 on March 31, 2023, to a peak of 3.36 on September 30, 2020. A quick ratio below 1 indicates potential difficulties in meeting short-term obligations without relying on the sale of inventory. The company faced challenges in maintaining a consistent and healthy quick ratio throughout the periods analyzed.
3. Cash Ratio: The cash ratio is the most conservative liquidity metric, focusing solely on the company's ability to cover short-term obligations with its cash and cash equivalents. Williams Companies Inc's cash ratio varied widely, with values ranging from -1.14 on March 31, 2023, to a peak of 2.82 on September 30, 2020. A cash ratio below 1 suggests that the company may struggle to meet its short-term obligations with cash alone. The company's cash ratio also displayed inconsistency over the periods examined.
In summary, based on the liquidity ratios analyzed, Williams Companies Inc experienced fluctuations and inconsistencies in its ability to meet short-term financial obligations. The company's current, quick, and cash ratios demonstrated periods of weakness, signaling potential liquidity challenges that may require further attention and management strategies to improve its short-term financial stability.
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 | -520.49 | -345.50 | -380.20 | -327.65 | -457.10 | -430.48 | -310.27 | -358.44 | -751.37 | -923.74 | -1,000.95 | -694.20 | -722.80 | -399.13 | -117.01 | -101.32 | -13.13 | -0.07 | -55.31 | 5.08 |
The cash conversion cycle of Williams Companies Inc has exhibited significant fluctuations over the analyzed period. The company's cash conversion cycle, which represents the time taken to convert raw materials into cash via sales, has shown negative values consistently. This suggests that Williams Companies Inc is efficient in managing its working capital and converting its inventory and receivables into cash swiftly.
The trend indicates a considerable improvement in efficiency over time, as the cash conversion cycle has decreased from around 5 days in March 2020 to approximately -520 days by December 2024. A negative cash conversion cycle implies that the company is able to collect cash from its customers before paying its suppliers, leading to a beneficial working capital position.
The consistent negative values in the cash conversion cycle can indicate strong supplier and customer relationships, effective inventory management, and efficient accounts receivable collection processes. This efficiency in cash conversion reflects positively on Williams Companies Inc's financial health and operational effectiveness.