Exxon Mobil Corp. (NYSE:XOM)

The liquidity position, as indicated by the observed ratios, demonstrates a generally decreasing trend over the analyzed period, spanning from March 31, 2022, to December 31, 2025. While initial values suggest a reasonable ability to meet short-term obligations, a consistent decline is apparent across all measured metrics.

Current Ratio

The current ratio exhibited an upward trajectory from 1.07 in March 2022 to a peak of 1.48 in June 2023. Subsequently, the ratio experienced a gradual decline, ending at 1.15 in December 2025. This suggests an initial strengthening of the company’s ability to cover current liabilities with current assets, followed by a weakening of this position over time. The decline, while consistent, remains above 1.0 for the entire period, indicating continued, though diminishing, short-term solvency.

Quick Ratio

Similar to the current ratio, the quick ratio increased from 0.74 in March 2022 to 1.07 in March 2023. A relatively stable period followed, with the ratio fluctuating around 1.0. However, a more pronounced downward trend emerged in the latter half of the period, culminating in a value of 0.76 in December 2025. This indicates a decreasing ability to meet short-term obligations with the most liquid assets, excluding inventory. The decline below 1.0 in the final periods suggests a potential increase in reliance on inventory liquidation to meet immediate liabilities.

Cash Ratio

The cash ratio demonstrated the most consistent downward trend of the three ratios. Starting at 0.15 in March 2022, it rose to a peak of 0.49 in March 2023, before steadily decreasing to 0.15 by December 2025. This signifies a diminishing proportion of current assets held in cash, and a corresponding decrease in the company’s capacity to cover immediate liabilities with readily available funds. The ratio’s low values throughout the period indicate a limited reliance on cash for short-term solvency.

Overall, the observed trends suggest a gradual erosion of the company’s liquidity position. While the ratios generally remain within acceptable ranges for much of the period, the consistent declines warrant monitoring. The decreasing quick and cash ratios, in particular, indicate a potential increase in vulnerability to short-term financial pressures.

The current ratio exhibited a generally increasing trend from March 31, 2022, through June 30, 2023, followed by a subsequent decline through December 31, 2025. Initial values indicated a ratio of 1.07, increasing to a peak of 1.48 in June 2023. The period from September 2023 to December 2025 shows a decreasing trend, concluding at a ratio of 1.15.

Overall Trend

The current ratio demonstrated an initial strengthening of the company’s short-term liquidity position, peaking in the first half of 2023. However, the latter portion of the analyzed period reveals a weakening of this position, although the ratio remained above 1.0 throughout the entire timeframe.

Increase (March 2022 – June 2023)

From March 31, 2022, to June 30, 2023, the current ratio increased from 1.07 to 1.48. This suggests an improvement in the company’s ability to cover its short-term liabilities with its short-term assets. The increase could be attributed to growth in current assets, a decrease in current liabilities, or a combination of both.

Decrease (June 2023 – December 2025)

Following the peak in June 2023, the current ratio decreased to 1.15 by December 31, 2025. This indicates a potential weakening in short-term liquidity. The decline could be due to a faster growth rate in current liabilities compared to current assets, or an absolute decrease in current assets. The ratio remained above 1.0, indicating the company still possesses sufficient current assets to cover its current liabilities, but the margin of safety diminished over time.

Volatility

While the overall trend is discernible, there are some fluctuations within the period. For example, a decrease from 1.48 in June 2023 to 1.42 in September 2023, followed by a rebound to 1.48 in December 2023. These fluctuations suggest that short-term liquidity management may be subject to some degree of variability.

In summary, the current ratio initially improved, indicating a stronger short-term financial position, but subsequently declined, suggesting a potential weakening of liquidity. Continued monitoring of this ratio is recommended to assess the sustainability of the company’s short-term solvency.

The quick ratio exhibited a generally improving trend from March 31, 2022, through December 31, 2022, followed by a period of fluctuation and a subsequent decline through December 31, 2025. Initial values indicated a moderate ability to meet short-term obligations with highly liquid assets, which strengthened over the analyzed period before weakening again.

Overall Trend

The quick ratio began at 0.74 in March 2022 and increased to a peak of 1.07 in March 2023. Following this peak, the ratio experienced variability, oscillating between 1.06 and 0.98 over the subsequent three quarters. A consistent downward trend then emerged, culminating in a ratio of 0.76 by December 2025. This suggests a diminishing capacity to cover immediate liabilities with quick assets over the latter portion of the period.

Short-Term Improvement (March 2022 - March 2023)

From March 2022 to March 2023, the quick ratio demonstrated consistent growth. This improvement suggests an increase in the proportion of liquid assets relative to current liabilities, potentially indicating enhanced short-term financial flexibility. The ratio moved from below 1.0 to above 1.0, signifying the company’s ability to cover its current liabilities with its most liquid assets.

Period of Stability (April 2023 - December 2023)

Between April 2023 and December 2023, the quick ratio remained relatively stable, fluctuating within a narrow range of 1.05 to 0.98. This period indicates a consistent, though not improving, ability to meet short-term obligations. The slight decrease during this period may be attributed to minor shifts in the composition of current assets and liabilities.

Long-Term Decline (January 2024 - December 2025)

From January 2024 through December 2025, a clear downward trend in the quick ratio is observed. The ratio decreased from 1.02 in January 2024 to 0.76 in December 2025. This decline suggests a weakening of the company’s short-term liquidity position, potentially due to an increase in current liabilities or a decrease in quick assets, or a combination of both. The ratio falling below 1.0 again indicates a potential vulnerability in meeting short-term obligations without relying on inventory sales.

The observed fluctuations and the ultimate decline in the quick ratio warrant further investigation into the underlying drivers of these changes, including detailed analysis of current asset and current liability components.

The cash ratio exhibited a generally increasing trend from March 31, 2022, through December 31, 2022, followed by fluctuations and a subsequent decline through December 31, 2025. Initial values were relatively low, increasing significantly before stabilizing and then decreasing again.

Initial Increase (Mar 31, 2022 – Dec 31, 2022)

The cash ratio began at 0.15 in March 2022 and rose to 0.43 by December 2022. This indicates a strengthening of the company’s ability to meet its short-term obligations with only cash and cash equivalents. The increase suggests a build-up of liquid assets relative to current liabilities during this period.

Stabilization and Subsequent Decline (Mar 31, 2023 – Dec 31, 2025)

Following the peak in December 2022, the cash ratio experienced some volatility, remaining between 0.46 and 0.49 through September 2023. A downward trend then commenced, with the ratio decreasing to 0.33 by December 2024 and further declining to 0.15 by December 2025. This suggests a reduction in the proportion of current liabilities covered by available cash.

Recent Performance (Jun 30, 2024 – Dec 31, 2025)

From June 2024 to December 2025, the cash ratio decreased from 0.37 to 0.15. This represents a substantial reduction in the company’s most liquid assets available to cover immediate liabilities. The decline in the latter half of the period is more pronounced than earlier fluctuations.

Total Cash Assets

Total cash assets increased significantly from March 2022 to September 2022, peaking at US$30,464 million. While remaining relatively high through March 2023, a consistent decline is observed from June 2023 onwards, reaching US$10,681 million by December 2025. This decrease in cash assets contributes to the observed decline in the cash ratio.

Current Liabilities

Current liabilities fluctuated between US$61,815 million and US$80,110 million throughout the analyzed period. While there isn’t a consistent upward or downward trend, the relatively stable level of current liabilities, combined with the decreasing cash assets, explains the declining cash ratio.

In summary, the company demonstrated a strong liquidity position in late 2022, but this position weakened considerably over the subsequent three years, as evidenced by the declining cash ratio and decreasing total cash assets.