Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
ConocoPhillips, liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.29 | 1.43 | 1.46 | 1.34 | 2.25 | |
| Quick ratio | 1.06 | 1.21 | 1.27 | 1.10 | 1.98 | |
| Cash ratio | 0.50 | 0.66 | 0.72 | 0.55 | 1.46 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Current Ratio
- The current ratio declined significantly from 2.25 in 2020 to 1.34 in 2021. It showed a minor recovery to 1.46 in 2022 and maintained a slightly lower but relatively stable level around 1.43 in 2023. However, it decreased again to 1.29 in 2024. Overall, the trend suggests a reduction in short-term liquidity over the five-year period, with the company moving from a very strong liquidity position toward a more moderate one.
- Quick Ratio
- The quick ratio followed a similar downward trend as the current ratio. Starting at 1.98 in 2020, it dropped substantially to 1.1 in 2021. The ratio showed a modest improvement in 2022 to 1.27, then slightly declined to 1.21 in 2023 and further to 1.06 in 2024. This pattern indicates a weakening ability to cover short-term liabilities with liquid assets excluding inventory, reflecting a conservative decline in immediate liquidity.
- Cash Ratio
- The cash ratio showed the most pronounced decrease among the three liquidity measures. From a strong 1.46 in 2020, it sharply declined to 0.55 in 2021. Although there was a slight recovery to 0.72 in 2022, it decreased again to 0.66 in 2023 and further to a low 0.5 in 2024. This trend reveals a steadily diminishing cash and cash-equivalent buffer relative to current liabilities, indicating a decreased capacity to meet short-term obligations using only cash resources.
Current Ratio
ConocoPhillips, current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 15,647) | 14,330) | 18,749) | 16,050) | 12,066) | |
| Current liabilities | 12,124) | 10,005) | 12,847) | 12,021) | 5,366) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.29 | 1.43 | 1.46 | 1.34 | 2.25 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | 1.06 | 1.27 | 1.47 | 1.26 | 1.18 | |
| Exxon Mobil Corp. | 1.31 | 1.48 | 1.41 | 1.04 | 0.80 | |
| Occidental Petroleum Corp. | 0.95 | 0.92 | 1.15 | 1.23 | 1.07 | |
| Current Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.21 | 1.37 | 1.42 | 1.15 | 1.00 | |
| Current Ratio, Industry | ||||||
| Energy | 1.23 | 1.37 | 1.40 | 1.15 | 1.02 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 15,647 ÷ 12,124 = 1.29
2 Click competitor name to see calculations.
- Current Assets
- Current assets demonstrated a general upward trend from 2020 to 2022, increasing from 12,066 million USD to 18,749 million USD. However, there was a notable decline in 2023 to 14,330 million USD, followed by a recovery in 2024, rising again to 15,647 million USD. This pattern suggests volatility in liquid assets available within the company, with a peak in 2022 before a decrease and partial rebound in the subsequent years.
- Current Liabilities
- Current liabilities exhibited a sharp increase from 2020 through 2022, rising from 5,366 million USD to 12,847 million USD. This represents more than a doubling in the span of two years. In 2023, current liabilities declined to 10,005 million USD but increased again in 2024, reaching 12,124 million USD. Overall, liabilities remain significantly elevated compared to 2020 levels, indicating increased short-term obligations.
- Current Ratio
- The current ratio showed a pronounced decline from 2.25 in 2020 to 1.34 in 2021, reflecting a reduction in liquidity and a tighter margin between current assets and liabilities. Subsequently, it saw slight improvements to 1.46 in 2022 and a minor decrease to 1.43 in 2023. In 2024, the ratio decreased again to 1.29. Despite fluctuations, the ratio remained above 1 throughout the period, suggesting the company retained the ability to cover its short-term obligations, although with reduced cushioning compared to 2020.
- Overall Insights
- The data indicates that the company experienced increased current liabilities over the years, which contributed to a declining current ratio despite some recovery in current assets after 2022. The declining current ratio implies a weakening short-term liquidity position relative to earlier years. The ability to manage working capital efficiently appears to have become more challenging from 2021 onward, warranting monitoring to ensure ongoing solvency and financial flexibility.
Quick Ratio
ConocoPhillips, quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 5,607) | 5,635) | 6,458) | 5,028) | 2,991) | |
| Short-term investments | 507) | 971) | 2,785) | 446) | 3,609) | |
| Accounts and notes receivable, net of allowance | 6,621) | 5,461) | 7,075) | 6,543) | 2,634) | |
| Accounts and notes receivable, related parties | 74) | 13) | 13) | 127) | 120) | |
| Investment in Cenovus Energy | —) | —) | —) | 1,117) | 1,256) | |
| Total quick assets | 12,809) | 12,080) | 16,331) | 13,261) | 10,610) | |
| Current liabilities | 12,124) | 10,005) | 12,847) | 12,021) | 5,366) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 1.06 | 1.21 | 1.27 | 1.10 | 1.98 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.71 | 0.87 | 1.12 | 0.90 | 0.77 | |
| Exxon Mobil Corp. | 0.95 | 1.06 | 1.03 | 0.69 | 0.44 | |
| Occidental Petroleum Corp. | 0.67 | 0.60 | 0.68 | 0.84 | 0.50 | |
| Quick Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.87 | 0.99 | 1.06 | 0.80 | 0.62 | |
| Quick Ratio, Industry | ||||||
| Energy | 0.88 | 0.98 | 1.04 | 0.81 | 0.63 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 12,809 ÷ 12,124 = 1.06
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets showed a generally increasing trend from 2020 to 2022, rising from $10,610 million to $16,331 million. However, there was a notable decline in 2023 to $12,080 million, followed by a slight recovery in 2024 to $12,809 million. This pattern indicates that after a period of growth, the company's liquid assets available for immediate obligations decreased, with a marginal improvement in the most recent year.
- Current Liabilities
- Current liabilities more than doubled between 2020 and 2021, increasing from $5,366 million to $12,021 million, and continued to rise slightly to $12,847 million in 2022. Subsequently, there was a reduction in 2023 to $10,005 million, but liabilities increased again in 2024 to $12,124 million. This volatility suggests fluctuations in the company's short-term obligations, with peak liabilities occurring in 2022 and 2024, and a temporary decrease in 2023.
- Quick Ratio
- The quick ratio declined significantly from 1.98 in 2020 to 1.10 in 2021, indicating a reduction in the company's immediate liquidity relative to its current liabilities. It improved slightly to 1.27 in 2022, then marginally decreased to 1.21 in 2023, and dropped again to 1.06 in 2024. Overall, the quick ratio trends suggest a weakening in the company's ability to meet short-term liabilities with its most liquid assets over the period, with the ratio moving closer to the critical threshold of 1.0.
- Summary of Financial Health Trends
- The company exhibited increased quick assets and current liabilities in the initial years, followed by more fluctuating figures in the later years. The decreasing quick ratio from 2020 through 2024 reflects a decline in liquidity, signaling potential challenges in covering short-term obligations without relying on inventory or other less liquid assets. The data points to a need for careful monitoring of liquidity management to ensure financial stability.
Cash Ratio
ConocoPhillips, cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 5,607) | 5,635) | 6,458) | 5,028) | 2,991) | |
| Short-term investments | 507) | 971) | 2,785) | 446) | 3,609) | |
| Investment in Cenovus Energy | —) | —) | —) | 1,117) | 1,256) | |
| Total cash assets | 6,114) | 6,606) | 9,243) | 6,591) | 7,856) | |
| Current liabilities | 12,124) | 10,005) | 12,847) | 12,021) | 5,366) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.50 | 0.66 | 0.72 | 0.55 | 1.46 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.18 | 0.25 | 0.52 | 0.21 | 0.25 | |
| Exxon Mobil Corp. | 0.33 | 0.48 | 0.43 | 0.12 | 0.08 | |
| Occidental Petroleum Corp. | 0.22 | 0.16 | 0.13 | 0.33 | 0.24 | |
| Cash Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.29 | 0.41 | 0.47 | 0.21 | 0.22 | |
| Cash Ratio, Industry | ||||||
| Energy | 0.30 | 0.40 | 0.45 | 0.22 | 0.22 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 6,114 ÷ 12,124 = 0.50
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations in the company's liquidity and short-term obligations over the five-year period ending December 31, 2024.
- Total Cash Assets
- There is an inconsistent trend in total cash assets, beginning with a balance of US$7,856 million at the end of 2020, decreasing to US$6,591 million in 2021, then rising significantly to US$9,243 million in 2022. However, this increase was not sustained, as cash assets declined again to US$6,606 million in 2023, followed by a further decrease to US$6,114 million in 2024. This volatility suggests changes in cash management or varying cash inflows and outflows over the years.
- Current Liabilities
- Current liabilities exhibit a rising trajectory with some fluctuations. Starting from US$5,366 million at the end of 2020, liabilities more than doubled to US$12,021 million in 2021, continued to grow slightly to US$12,847 million in 2022, then decreased to US$10,005 million in 2023 before increasing again to US$12,124 million in 2024. The peak values in 2021, 2022, and 2024 indicate periods of increased short-term financial obligations.
- Cash Ratio
- The cash ratio, reflecting the company's ability to cover current liabilities with cash and cash equivalents, shows a declining trend. From a robust 1.46 in 2020, it dropped sharply to 0.55 in 2021 and modestly improved to 0.72 in 2022. Subsequently, it declined again to 0.66 in 2023 and further to 0.50 in 2024. This downward pattern indicates a decreasing capacity to immediately cover short-term liabilities with available cash, implying increased liquidity risk over time.
Overall, the data suggests that despite occasional increases in cash holdings, the company's current liabilities have generally increased, putting pressure on its liquidity position as reflected in the declining cash ratio. This trend may warrant attention to the management of short-term obligations and cash reserves to maintain financial stability.