Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Apache Corp., liquidity ratios
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Current ratio | 2.04 | 1.75 | 1.35 | 0.90 | 0.97 | |
| Quick ratio | 1.48 | 0.76 | 1.03 | 0.59 | 0.68 | |
| Cash ratio | 0.80 | 0.21 | 0.41 | 0.03 | 0.06 |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
A significant improvement in the liquidity profile is observed over the period from 2011 to 2015. The transition from ratios below 1.0 to values significantly exceeding that threshold indicates a strategic shift toward a more conservative and liquid financial position, reducing the risk of short-term insolvency.
- Current Ratio
- An upward trend is established following 2012, with the ratio increasing from 0.90 to 2.04 by the end of 2015. This growth demonstrates a steady expansion of the margin of safety regarding the coverage of current liabilities with current assets.
- Quick Ratio
- Volatility is present, with a notable dip to 0.59 in 2012 followed by a recovery and a peak of 1.48 in 2015. The overall movement reflects a substantial increase in the ability to meet immediate obligations without relying on the sale of inventory.
- Cash Ratio
- The cash ratio exhibits the most dramatic fluctuations, rising from a negligible 0.03 in 2012 to 0.80 in 2015. The strong correlation between the movements of the cash ratio and the quick ratio suggests that changes in immediate liquidity were primarily driven by cash holdings rather than other liquid assets.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Current Ratio
Apache Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 3,752) | 6,415) | 6,366) | 4,962) | 4,803) | |
| Current liabilities | 1,841) | 3,664) | 4,700) | 5,536) | 4,963) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 2.04 | 1.75 | 1.35 | 0.90 | 0.97 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Current ratio = Current assets ÷ Current liabilities
= 3,752 ÷ 1,841 = 2.04
2 Click competitor name to see calculations.
The liquidity position exhibited a significant positive trajectory between 2011 and 2015, evolving from a state of short-term obligation pressure to a robust surplus of liquid assets.
- Current Ratio Trend
- The current ratio demonstrated a consistent upward trend following an initial decline. After starting at 0.97 in 2011 and reaching a low of 0.90 in 2012, the ratio improved sharply to 1.35 in 2013. This growth continued through 2014 and 2015, concluding the period at 2.04, indicating that current assets were more than double the current liabilities by the end of the observed timeframe.
- Current Assets Analysis
- Current assets experienced moderate growth from 2011 through 2014, peaking at 6,415 million US dollars. However, a substantial contraction occurred in 2015, with assets decreasing to 3,752 million US dollars. Despite this sharp reduction in asset volume, the overall liquidity ratio continued to strengthen.
- Current Liabilities Analysis
- A sustained reduction in short-term obligations is evident. Following a peak of 5,536 million US dollars in 2012, current liabilities decreased consistently and aggressively each subsequent year. By 2015, liabilities had been reduced to 1,841 million US dollars, representing a significant decrease from the 2012 high.
- Liquidity Insights
- The expansion of the current ratio was primarily driven by the aggressive reduction of current liabilities rather than the accumulation of current assets. In 2015, the simultaneous decline in both assets and liabilities resulted in the highest ratio of the period, suggesting a transition toward a leaner but more liquid balance sheet structure.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Quick Ratio
Apache Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 1,467) | 769) | 1,906) | 160) | 295) | |
| Receivables, net of allowance | 1,253) | 2,024) | 2,952) | 3,086) | 3,079) | |
| Total quick assets | 2,720) | 2,793) | 4,858) | 3,246) | 3,374) | |
| Current liabilities | 1,841) | 3,664) | 4,700) | 5,536) | 4,963) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 1.48 | 0.76 | 1.03 | 0.59 | 0.68 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 2,720 ÷ 1,841 = 1.48
2 Click competitor name to see calculations.
The liquidity profile between 2011 and 2015 is characterized by significant volatility in both liquid asset levels and short-term obligations, culminating in a strengthened liquidity position by the end of the period.
- Quick Asset Volatility
- Quick assets remained relatively stable between 2011 and 2012 before experiencing a substantial increase to 4,858 million US$ in 2013. This peak was followed by a sharp contraction in 2014, with values stabilizing at 2,720 million US$ by 2015.
- Current Liabilities Management
- After reaching a peak of 5,536 million US$ in 2012, current liabilities exhibited a consistent downward trend over the subsequent three years. A notable reduction occurred between 2014 and 2015, where liabilities decreased by nearly 50%, falling to 1,841 million US$.
- Quick Ratio Evolution
- The quick ratio fluctuated from 0.68 in 2011 to a period low of 0.59 in 2012, suggesting limited capacity to cover immediate obligations. A temporary improvement occurred in 2013 as the ratio rose to 1.03, followed by a decline to 0.76 in 2014. By 2015, the ratio reached a period high of 1.48, a shift driven primarily by the aggressive reduction of current liabilities rather than an expansion of quick assets.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Cash Ratio
Apache Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 1,467) | 769) | 1,906) | 160) | 295) | |
| Total cash assets | 1,467) | 769) | 1,906) | 160) | 295) | |
| Current liabilities | 1,841) | 3,664) | 4,700) | 5,536) | 4,963) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.80 | 0.21 | 0.41 | 0.03 | 0.06 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 1,467 ÷ 1,841 = 0.80
2 Click competitor name to see calculations.
The liquidity position experienced significant volatility between 2011 and 2015, characterized by an overall improvement in the capacity to cover short-term obligations with cash assets. While the initial years showed minimal liquidity, the final period demonstrates a substantially strengthened cash position.
- Cash Asset Trends
- Total cash assets exhibited substantial fluctuation, starting at 295 million USD in 2011 and reaching a peak of 1,906 million USD in 2013. Following a decline to 769 million USD in 2014, assets recovered to 1,467 million USD by the end of 2015.
- Current Liabilities Trajectory
- Current liabilities peaked in 2012 at 5,536 million USD before entering a consistent downward trend. By December 31, 2015, these obligations were reduced to 1,841 million USD, representing a significant contraction in short-term debt requirements over the observed period.
- Cash Ratio Performance
- The cash ratio demonstrates a marked improvement in immediate liquidity. After reaching a low of 0.03 in 2012, the ratio rose to 0.41 in 2013, moderated to 0.21 in 2014, and culminated in a period high of 0.80 in 2015. This progression indicates a shift toward a more liquid balance sheet, where a significantly larger proportion of current liabilities can be settled using cash on hand compared to the baseline in 2011.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?