Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Anadarko Petroleum Corp., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
- Current Ratio
- The current ratio demonstrates a general downward trend from March 2013 through June 2014, decreasing from 1.8 to a low of 0.83, indicating a reduction in current asset coverage of current liabilities during this period. Following this decline, there is moderate recovery and stabilization around the 1.0 mark through the end of 2015. In 2016, the ratio falls again to below 1.0, signaling tighter short-term liquidity. However, starting late 2016 and continuing through September 2017, there is a notable improvement with the current ratio rising sharply, reaching a peak of 2.53 in June 2017 before slightly retreating to 2.03. This suggests a strengthened ability to meet short-term obligations in the most recent period.
- Quick Ratio
- The quick ratio follows a pattern similar to the current ratio, showing a decline from 1.6 in early 2013 to around 0.78 in mid-2014, reflecting decreased liquidity excluding inventory. After this trough, there is some recovery, with the ratio hovering close to or just above 1.0 during late 2014 and 2015. A subsequent dip occurs in early 2016, with values dropping below 0.9, before the ratio improves significantly beginning late 2016. By mid-2017, the quick ratio peaks at 2.43, indicating enhanced liquid assets readily available to cover current liabilities, though it moderates slightly to 1.94 by September 2017.
- Cash Ratio
- The cash ratio exhibits a declining trend from 0.92 in March 2013 to a low of 0.22 in December 2015, highlighting a significant reduction in cash and cash equivalents relative to current liabilities over this timeframe. This suggests diminished immediate liquidity. There is minimal improvement during early 2016. A sharp rebound begins in late 2016, with the ratio more than doubling to 1.06 by September 2016 and peaking at 1.90 in June 2017. The ratio then decreases slightly to 1.43 in September 2017 but remains substantially higher than earlier low points, reflecting a restored and enhanced cash position relative to short-term liabilities by the most recent quarters.
- Overall Liquidity Trends
- The liquidity metrics collectively depict an initial period of weakening short-term financial health lasting through mid-2014 to 2016, characterized by declining current, quick, and cash ratios. This period may have implied increasing difficulty in meeting short-term obligations. Subsequent quarters show a marked turnaround with improvements across all ratios, culminating in strong liquidity positions by mid-2017, with current and quick ratios exceeding 2.0 and cash ratio nearing 2.0. The recovery suggests effective liquidity management and possibly enhanced cash generation or capital structure adjustments during the latter period analyzed.
Current Ratio
Anadarko Petroleum Corp., current ratio calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current assets | 7,473) | 7,984) | 7,707) | 5,266) | 5,918) | 3,212) | 5,767) | 3,982) | 5,187) | 5,410) | 5,165) | 11,221) | 11,739) | 8,980) | 9,664) | 7,108) | 7,140) | 7,899) | 7,310) | ||||||
| Current liabilities | 3,683) | 3,154) | 3,762) | 3,328) | 3,762) | 3,244) | 6,657) | 4,181) | 4,438) | 4,669) | 5,228) | 10,234) | 10,983) | 10,760) | 10,929) | 5,703) | 4,738) | 5,013) | 4,072) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Current ratio1 | 2.03 | 2.53 | 2.05 | 1.58 | 1.57 | 0.99 | 0.87 | 0.95 | 1.17 | 1.16 | 0.99 | 1.10 | 1.07 | 0.83 | 0.88 | 1.25 | 1.51 | 1.58 | 1.80 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
1 Q3 2017 Calculation
Current ratio = Current assets ÷ Current liabilities
= 7,473 ÷ 3,683 = 2.03
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable fluctuations and trends in the liquidity position of the company over the observed periods.
- Current Assets
- Current assets experienced variability with an overall pattern of initial growth followed by a significant decline and subsequent recovery. Starting at 7,310 million USD in the first quarter of 2013, current assets increased to peak levels around 11,739 million USD by the third quarter of 2014. Following this peak, a sharp decrease occurred, bringing assets down to 3,982 million USD by the last quarter of 2015. After this low point, current assets showed a gradual recovery trend, reaching approximately 7,984 million USD in the second quarter of 2017, though not consistently higher than the mid-2014 peak.
- Current Liabilities
- Current liabilities showed an upward trend during the first two years, rising from 4,072 million USD in early 2013 to a high of 10,983 million USD in the third quarter of 2014. This was followed by a substantial reduction, with liabilities falling to 3,244 million USD by the second quarter of 2016. After this trough, liabilities fluctuated moderately within a range of approximately 3,154 to 3,762 million USD up to the third quarter of 2017. This suggests effective management in reducing short-term obligations after a period of elevated liabilities.
- Current Ratio
- The current ratio, an indicator of short-term financial health, portrays a dynamic pattern closely linked to the movements of current assets and liabilities. Initially, the ratio declined from 1.80 to 1.25 in 2013, then sharply dropped below 1.0 by the first quarter of 2014, reaching a low of 0.83 in the second quarter of 2014, signaling possible liquidity stress during this phase. Following that period, the ratio recovered gradually, surpassing 1.0 by the fourth quarter of 2014. Notably, after declining again temporarily at the end of 2015 and early 2016, a strong improvement is observed from mid-2016 onward, culminating in a ratio exceeding 2.5 in the second quarter of 2017. This upward trend implies a strengthening liquidity position, improving the company’s ability to cover its current liabilities with current assets.
Quick Ratio
Anadarko Petroleum Corp., quick ratio calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Cash and cash equivalents | 5,251) | 6,008) | 5,831) | 3,184) | 3,980) | 1,394) | 2,947) | 939) | 2,072) | 2,173) | 2,308) | 7,369) | 8,335) | 5,365) | 5,924) | 3,698) | 3,939) | 4,581) | 3,735) | ||||||
| Accounts receivable, net of allowance, customers | 1,009) | 834) | 973) | 1,007) | 848) | 770) | 633) | 652) | 833) | 1,028) | 1,025) | 1,118) | 1,350) | 1,484) | 1,674) | 1,481) | 1,266) | 1,302) | 1,511) | ||||||
| Accounts receivable, net of allowance, others | 873) | 820) | 604) | 721) | 743) | 730) | 1,759) | 1,817) | 1,636) | 1,574) | 1,149) | 1,409) | 1,362) | 1,595) | 1,375) | 1,241) | 1,199) | 1,254) | 1,249) | ||||||
| Total quick assets | 7,133) | 7,662) | 7,408) | 4,912) | 5,571) | 2,894) | 5,339) | 3,408) | 4,541) | 4,775) | 4,482) | 9,896) | 11,047) | 8,444) | 8,973) | 6,420) | 6,404) | 7,137) | 6,495) | ||||||
| Current liabilities | 3,683) | 3,154) | 3,762) | 3,328) | 3,762) | 3,244) | 6,657) | 4,181) | 4,438) | 4,669) | 5,228) | 10,234) | 10,983) | 10,760) | 10,929) | 5,703) | 4,738) | 5,013) | 4,072) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Quick ratio1 | 1.94 | 2.43 | 1.97 | 1.48 | 1.48 | 0.89 | 0.80 | 0.82 | 1.02 | 1.02 | 0.86 | 0.97 | 1.01 | 0.78 | 0.82 | 1.13 | 1.35 | 1.42 | 1.60 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
1 Q3 2017 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 7,133 ÷ 3,683 = 1.94
2 Click competitor name to see calculations.
- Quick assets trends
- The total quick assets display volatility over the quarters, with a notable increase from early 2013 to the end of 2014, peaking around September 2014 at 11,047 million USD. Following this peak, there is a sharp decline throughout 2015, reaching a low of 3,408 million USD by December 2015. After this downturn, quick assets recover somewhat, fluctuating between approximately 2,894 million and 7,662 million USD through 2016 and 2017.
- Current liabilities trends
- Current liabilities exhibit significant fluctuations. There is a peak in the first half of 2014, with values exceeding 10,000 million USD, indicating heightened short-term obligations. This is followed by a marked decline through 2015 and 2016, hitting lows near 3,150 million USD mid-2017. The data suggests a reduction in current liabilities after 2014, stabilizing at lower levels through 2017.
- Quick ratio analysis
- The quick ratio reveals variations in short-term liquidity. It begins relatively strong in 2013, ranging from 1.13 to 1.6, before dropping below 1.0 throughout much of 2014 and 2015, indicating potential liquidity concerns during this period. From late 2015 onward, the quick ratio improves notably, surpassing 1.0 consistently in 2016 and reaching values as high as 2.43 by mid-2017. This improvement reflects enhanced liquidity and a better coverage of current liabilities by quick assets in recent periods.
- Overall liquidity insights
- The interplay between quick assets and current liabilities suggests periods of liquidity stress around 2014 and 2015, characterized by high liabilities coupled with declining quick assets and lower quick ratios. Subsequent years show recovery in liquidity metrics, with the company improving its quick ratio, indicative of a stronger financial position in managing short-term obligations up to 2017.
Cash Ratio
Anadarko Petroleum Corp., cash ratio calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Cash and cash equivalents | 5,251) | 6,008) | 5,831) | 3,184) | 3,980) | 1,394) | 2,947) | 939) | 2,072) | 2,173) | 2,308) | 7,369) | 8,335) | 5,365) | 5,924) | 3,698) | 3,939) | 4,581) | 3,735) | ||||||
| Total cash assets | 5,251) | 6,008) | 5,831) | 3,184) | 3,980) | 1,394) | 2,947) | 939) | 2,072) | 2,173) | 2,308) | 7,369) | 8,335) | 5,365) | 5,924) | 3,698) | 3,939) | 4,581) | 3,735) | ||||||
| Current liabilities | 3,683) | 3,154) | 3,762) | 3,328) | 3,762) | 3,244) | 6,657) | 4,181) | 4,438) | 4,669) | 5,228) | 10,234) | 10,983) | 10,760) | 10,929) | 5,703) | 4,738) | 5,013) | 4,072) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Cash ratio1 | 1.43 | 1.90 | 1.55 | 0.96 | 1.06 | 0.43 | 0.44 | 0.22 | 0.47 | 0.47 | 0.44 | 0.72 | 0.76 | 0.50 | 0.54 | 0.65 | 0.83 | 0.91 | 0.92 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
1 Q3 2017 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 5,251 ÷ 3,683 = 1.43
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends regarding liquidity and short-term obligations.
- Total Cash Assets
- The total cash assets exhibit significant fluctuations over the analyzed quarters. From early 2013 through 2014, cash assets generally increased, peaking at 8,335 million US dollars in the third quarter of 2014. This was followed by a pronounced decline in 2015, reaching a minimum of 939 million US dollars in the fourth quarter, before recovering somewhat in 2016 and early 2017. Despite the recovery, cash assets remained below the previous highs attained in 2014.
- Current Liabilities
- Current liabilities showed an increasing trend from 2013 to 2014, peaking above 10,000 million US dollars during this period. Subsequently, liabilities declined sharply in 2015, falling to levels around 4,000 million US dollars. Throughout 2016 and into 2017, current liabilities stabilized with some fluctuations, remaining at more moderate levels between approximately 3,100 and 6,600 million US dollars.
- Cash Ratio
- The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, correspondingly fluctuated in response to changes in cash assets and liabilities. It declined from around 0.9 in early 2013 to a low of 0.22 in the closing quarter of 2015, indicating a deteriorated liquidity position. Subsequently, the ratio improved markedly throughout 2016 and 2017, reaching values above 1.5 in mid-2017, suggesting a stronger liquidity position capable of covering current liabilities entirely with cash.
Overall, the data suggest a period of financial tightening and reduced liquidity in 2015, likely attributable to the decline in cash assets not fully offset by reductions in current liabilities. The following years show a recovery in cash holdings and an improved capacity to meet short-term obligations, as evidenced by the rising cash ratio. These trends may reflect the company's strategic responses to changing economic conditions or operational challenges during the period.