Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
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Liquidity Ratios (Summary)
EOG Resources Inc., liquidity ratios
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Current Ratio
- The current ratio exhibited fluctuations over the analyzed five-year period. It increased from 1.42 in 2015 to a peak of 1.75 in 2016, indicating improved short-term liquidity. However, after 2016, the ratio declined to 1.2 in 2017 before showing a slight recovery to 1.36 in 2018. By the end of 2019, the current ratio decreased further to 1.18, suggesting a gradual reduction in the company’s ability to cover short-term liabilities with current assets.
- Quick Ratio
- The quick ratio followed a somewhat similar pattern to the current ratio. It improved markedly from 0.91 in 2015 to 1.39 in 2016, reflecting stronger immediate liquidity without reliance on inventory. After 2016, the quick ratio dropped to 0.89 in 2017 and then showed modest increases to 0.93 in 2018 and 0.9 in 2019. These movements indicate that the company’s liquid assets relative to current liabilities weakened after 2016 and stabilized at a slightly lower level than the initial year.
- Cash Ratio
- The cash ratio displayed considerable volatility during the period. It rose from 0.39 in 2015 to a high of 0.79 in 2016, indicating a significant increase in cash and cash equivalents relative to current liabilities. Subsequently, there was a sharp decline to 0.31 in 2017, followed by a gradual improvement to 0.42 in 2018 and 0.45 in 2019. Overall, the cash ratio remained below one throughout the period, signaling limited cash reserves in relation to short-term obligations.
- Summary
- Collectively, the liquidity ratios reflect a peak in short-term financial strength in 2016, followed by a general decline and stabilization at lower levels in subsequent years. The current and quick ratios remained above one for most years, indicating the company generally maintained sufficient short-term assets to meet liabilities. However, the decreasing trend after 2016 could imply increasing pressure on liquidity. The cash ratio consistently staying below one highlights relatively constrained cash availability, which may affect the firm’s flexibility in meeting immediate cash demands.
Current Ratio
EOG Resources Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibited a general upward trend over the analyzed period. Starting from 2,592,244 thousand US dollars at the end of 2015, the value increased noticeably to 3,554,603 thousand US dollars by the end of 2016. After a slight decline in 2017 to 3,279,108 thousand US dollars, current assets rose significantly in 2018 and 2019, reaching 5,057,390 and 5,273,339 thousand US dollars respectively. This indicates an overall growth in liquid resources available to the company across the years.
- Current Liabilities
- Current liabilities demonstrated a consistent increase throughout the period. From 1,819,287 thousand US dollars at the end of 2015, liabilities increased steadily each year, reaching 2,027,291 thousand in 2016, 2,725,542 thousand in 2017, 3,728,364 thousand in 2018, and eventually 4,486,988 thousand US dollars by the end of 2019. This suggests a rising short-term debt or obligations that the company must meet.
- Current Ratio
- The current ratio fluctuated within a narrow range, reflecting changes in the relationship between current assets and liabilities. It rose from 1.42 in 2015 to a peak of 1.75 in 2016, indicating improved short-term liquidity during that year. However, this was followed by a decline to 1.20 in 2017. There was a partial recovery in 2018 to 1.36, but the ratio decreased again to 1.18 in 2019. Despite increases in both assets and liabilities, the current ratio's decline in the latter years suggests that liabilities grew at a faster pace relative to assets, potentially signaling a slight weakening in short-term financial stability.
Quick Ratio
EOG Resources Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Accounts receivable, net | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets generally increased over the five-year period, rising from approximately 1.65 billion US dollars in 2015 to around 4.03 billion US dollars in 2019. Notably, there was a significant jump between 2015 and 2016, followed by a decrease in 2017. Subsequently, the trend reversed with consistent growth in 2018 and 2019, reaching the highest value at the end of the period.
- Current Liabilities
- Current liabilities exhibited a continuous upward trend throughout the same timeframe. Starting at roughly 1.82 billion US dollars in 2015, current liabilities increased steadily each year, culminating in nearly 4.49 billion US dollars in 2019. The rate of increase appears relatively consistent, with no years showing a decline or plateau.
- Quick Ratio
- The quick ratio showed variability across the periods, beginning below 1.0 at 0.91 in 2015. It improved notably to 1.39 in 2016, indicating a period where quick assets exceeded current liabilities. However, in the subsequent years, the ratio declined to 0.89 in 2017, improved slightly in 2018 to 0.93, and then decreased again to 0.9 in 2019. Despite fluctuations, the ratio remained close to but generally below the benchmark value of 1.0, suggesting that quick assets were slightly insufficient to cover current liabilities most years.
- Overall Analysis
- While total quick assets demonstrated a positive growth trajectory overall, the concurrent rise in current liabilities outpaced this growth, contributing to the decline in the quick ratio after 2016. The peak quick ratio in 2016 corresponds with a peak in quick asset growth relative to liabilities, but the subsequent decline indicates increasing short-term obligations compared to liquid assets. This trend suggests a potential tightening in liquidity position over the later years despite asset growth, which may warrant further monitoring and management focus.
Cash Ratio
EOG Resources Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets experienced notable fluctuations over the observed period. Starting at approximately 718.5 million USD in 2015, there was a significant increase in 2016, reaching close to 1.6 billion USD. However, in 2017, cash assets declined sharply to around 834 million USD. This was followed by another substantial rise in 2018 to approximately 1.56 billion USD, culminating in a further increase in 2019, reaching slightly above 2 billion USD. The overall trend suggests variability with an initial growth phase, a mid-period contraction, and a recovery leading to the highest level at the end of the period.
- Current liabilities
- Current liabilities showed a consistent upward trend throughout the timeframe. Starting at roughly 1.82 billion USD in 2015, these liabilities consistently increased each year: to about 2.03 billion USD in 2016, 2.73 billion USD in 2017, 3.73 billion USD in 2018, and peaking at nearly 4.49 billion USD in 2019. This steady increase points to growing short-term obligations for the company over the five-year span.
- Cash ratio
- The cash ratio varied throughout the period, reflecting changes in liquidity relative to current liabilities. It began at 0.39 in 2015, nearly doubling to 0.79 in 2016, indicating an improvement in liquidity. However, by 2017, it dropped to 0.31, marking a substantial decrease in immediate liquidity. The ratio then experienced modest recovery, increasing to 0.42 in 2018 and to 0.45 in 2019. Despite these improvements, the cash ratio remained below 0.50 for most years, signifying limited coverage of current liabilities solely by cash assets.