United States Steel Corporation (X)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.55 | 1.76 | 1.99 | 1.86 | 1.67 |
| Quick ratio | 0.40 | 0.73 | 1.30 | 1.19 | 1.56 |
| Cash ratio | 0.41 | 0.74 | 0.89 | 0.65 | 1.19 |
United States Steel Corporation's liquidity ratios show the following trends over the five-year period:
1. Current Ratio: The current ratio measures the company's ability to meet its short-term obligations with its current assets. The ratio has generally shown an increasing trend from 1.67 in 2020 to 1.55 in 2024. Although there was a slight dip in 2024, the company's current assets have been able to cover its current liabilities throughout the period.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. The trend for this ratio is more volatile compared to the current ratio, with a notable decline from 1.56 in 2020 to 0.40 in 2024. This indicates a decreasing ability to meet short-term obligations without relying on inventory.
3. Cash Ratio: The cash ratio focuses solely on the company's ability to cover current liabilities with its cash and cash equivalents. The trend for this ratio fluctuates, with a noticeable drop from 1.19 in 2020 to 0.41 in 2024. This suggests a reduced capacity to meet short-term obligations through cash holdings alone.
In summary, while the current ratio indicates that United States Steel Corporation has maintained a relatively stable ability to meet short-term obligations with its current assets over the years, the quick and cash ratios show a decline in the company's immediate liquidity position. This may raise concerns about its ability to efficiently manage short-term financial commitments without relying on inventory or cash reserves.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 54.42 | 47.04 | 77.67 | 90.03 | 87.21 |
The cash conversion cycle of United States Steel Corporation has shown fluctuations over the past five years.
As of December 31, 2020, the cash conversion cycle stood at 87.21 days, indicating that on average, it took the company 87.21 days to convert its investments in inventory and other resources into cash from sales. By December 31, 2021, this metric slightly increased to 90.03 days, suggesting a lengthening of the time required to recover cash from its operating cycle.
However, from December 31, 2021, to December 31, 2022, there was a noticeable improvement with the cash conversion cycle decreasing to 77.67 days. This signifies enhanced efficiency in managing working capital and converting resources into cash.
The trend continued positively as of December 31, 2023, with a significant drop in the cash conversion cycle to 47.04 days, indicating a substantial improvement in the company's operational efficiency and cash flow management.
By December 31, 2024, the cash conversion cycle slightly increased to 54.42 days, which, although higher than the previous year, still reflects a favorable position compared to the earlier years in the period under review.
Overall, the general trend of the cash conversion cycle for United States Steel Corporation demonstrates varying levels of efficiency in converting resources into cash across the years, with notable fluctuations and improvements observed within the timeframe analyzed.