Exxon Mobil Corp (XOM)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.31 | 1.48 | 1.41 | 1.04 | 0.80 |
| Quick ratio | 0.95 | 1.06 | 0.82 | 0.69 | 1.21 |
| Cash ratio | 0.33 | 0.48 | 0.21 | 0.12 | 0.85 |
Exxon Mobil Corp's liquidity position has shown improvement over the past few years based on the provided data.
- The current ratio, a measure of short-term liquidity, increased from 0.80 in 2020 to 1.31 in 2024. This indicates that the company's current assets have generally been increasing in relation to its current liabilities, suggesting an enhanced ability to cover its short-term obligations.
- The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, fluctuated over the years but remained above 1 in most cases. Despite some variability, a quick ratio above 1 indicates that Exxon Mobil Corp could meet its short-term obligations without relying on selling inventory.
- The cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) in relation to current liabilities, improved significantly from 0.12 in 2021 to 0.33 in 2024. This shows that the company had more cash on hand relative to its short-term obligations over the years.
Overall, Exxon Mobil Corp has demonstrated a strengthening liquidity position as indicated by the increasing current ratio, generally healthy quick ratio, and a notable improvement in the cash ratio.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -758.91 | -388.14 | -614.69 | -534.80 | -140.49 |
The cash conversion cycle of Exxon Mobil Corp has displayed fluctuations over the years, reflecting the efficiency of its working capital management. The negative values indicate that the company's cash cycle is relatively short, which can be advantageous as it suggests that Exxon Mobil is able to convert its inventory into cash quickly.
However, the significant decrease in the cash conversion cycle from -140.49 days in 2020 to -758.91 days in 2024 could raise some concerns. While a shorter cash conversion cycle is generally seen as positive, an excessively low value may potentially signify aggressive inventory management or extended accounts payable periods, which could adversely impact supplier relationships or signal potential cash flow issues.
It would be prudent for Exxon Mobil to carefully monitor these trends to ensure that its working capital management remains balanced and sustainable in the long term, while also considering the potential implications on its liquidity position and overall financial health.