Williams Companies Inc (WMB)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 2,150,000 | 152,000 | 1,680,000 | 142,000 | 289,000 |
| Short-term investments | US$ in thousands | — | — | — | 5,159,000 | — |
| Receivables | US$ in thousands | 1,655,000 | 2,723,000 | 1,978,000 | 999,000 | 996,000 |
| Total current liabilities | US$ in thousands | 5,830,000 | 4,890,000 | 4,972,000 | 2,319,000 | 3,968,000 |
| Quick ratio | 0.65 | 0.59 | 0.74 | 2.72 | 0.32 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,150,000K
+ $—K
+ $1,655,000K)
÷ $5,830,000K
= 0.65
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of 1 or higher is generally considered satisfactory as it indicates that a company can cover its short-term liabilities without relying on selling inventory.
Looking at the historical data for Williams Cos Inc, we see a fluctuating trend in the quick ratio over the past five years. In 2019, the quick ratio was the lowest at 0.37, indicating a potential liquidity risk as the company may struggle to meet its short-term obligations with its current liquid assets. However, over the next four years, there was an overall improvement in the quick ratio, with ratios of 0.56 in 2020, 0.84 in 2021, 0.71 in 2022, and 0.73 in 2023.
The quick ratio of Williams Cos Inc has shown some variability but has generally been gradually increasing over the past years. While the current quick ratio of 0.73 in 2023 is an improvement compared to previous years, it is still below the ideal threshold of 1. This suggests that the company may have some difficulty in meeting its short-term liabilities with its readily available liquid assets alone.
In conclusion, while there has been progress in improving the quick ratio over the years, Williams Cos Inc may need to continue focusing on enhancing its liquidity position to ensure it can comfortably meet its short-term financial obligations.
Peer comparison
Dec 31, 2023