Chevron Corp. (NYSE:CVX)

The analysis of the current assets and current liabilities over the given period reveals several important trends. Current assets generally demonstrated an overall increasing trend from 2005 to 2022, with some fluctuations. Starting at US$34.3 billion in 2005, current assets rose steadily to a peak of US$55.7 billion in 2012. Thereafter, there was a decline until 2016, where current assets reached a low of around US$29.6 billion. This was followed by a renewed upward movement, likely reflecting recovery or improved liquidity, culminating in a strong increase to US$50.3 billion in 2022. However, values declined again in the final two years available, ending at approximately US$40.9 billion in 2024.

Current liabilities exhibited more variability over the period but showed a less consistent trend compared to current assets. Starting at US$25.0 billion in 2005, liabilities increased to roughly US$33.8 billion by 2007, then decreased and fluctuated between about US$26 billion and US$34 billion through 2014. After a dip to US$22.2 billion in 2020, current liabilities again increased substantially, reaching their highest value in the dataset at US$38.6 billion by the end of 2024.

The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, moved in a rather inconsistent pattern that broadly reflects the interplay between the two components. Initial values in 2005 were moderately strong at 1.37, then gradually declined to a low near 1.14 in 2008. Improvement occurred in the following years, peaking at 1.68 in 2010 and maintaining relatively healthy levels above 1.5 until 2012. A notable dip below 1.0 occurred in 2016, indicating potential liquidity concerns during that year. Afterwards, the ratio recovered, reaching a strong level of 1.47 in 2022, but eased back down to 1.06 by 2024, suggesting a decrease in short-term liquidity.

Overall liquidity trends

The company showed fluctuations in liquidity management over the analyzed period, with periods of strong current ratios above 1.5 indicating comfortable short-term asset coverage of current liabilities, alternated with years of tighter liquidity positions near or below 1.0.

Periods of concern

The sharp drop in the current ratio to 0.93 in 2016 highlights a particularly strained liquidity condition, possibly due to higher current liabilities or reduced current assets in that year.

Asset growth vs. liabilities

Current assets grew more consistently than current liabilities, especially noticeable in the significant asset buildup by 2012 and recovery after 2016. However, the rapid increase in current liabilities towards the end of the period, especially 2023 and 2024, puts pressure on the liquidity ratio.

Recent trends

The declining current ratio from 1.47 in 2022 to 1.06 in 2024, coupled with rising current liabilities, may suggest emerging liquidity challenges or more aggressive short-term obligations in the latest years.