Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Halliburton Co., liquidity ratios (quarterly data)
Based on: 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
- Current Ratio
- The current ratio exhibits notable fluctuations over the observed periods, starting at 2.76 and reaching a peak of 4.03 at the end of 2015. This peak suggests a strong liquidity position during this quarter. Following this, the ratio generally declines and stabilizes around the mid-2 range through 2017 and 2018, ending at 2.32. The data indicates a return to a moderate level of liquidity after a temporary surge.
- Quick Ratio
- The quick ratio trends similarly to the current ratio but at generally lower levels, reflecting a more conservative measure of liquidity. It starts at 1.74 in early 2015, peaks at 2.87 in the fourth quarter of 2015, and then declines, oscillating around 1.5 to 2.0 in the subsequent quarters. From 2017 through 2018, the quick ratio remains relatively steady in the vicinity of 1.5, signaling a consistent level of liquid assets excluding inventory.
- Cash Ratio
- The cash ratio shows the most variability among the three liquidity metrics. It begins at 0.46, rises sharply to 1.88 at the end of 2015, indicating a substantial increase in cash and cash equivalents relative to current liabilities during that quarter. Subsequently, the ratio declines but exhibits some volatility, fluctuating between approximately 0.4 and 1.0. From early 2017 through 2018, the cash ratio remains relatively stable but lower than its peak, averaging around 0.45, which may imply a leaner cash position in relation to current liabilities.
- Overall Analysis
- The liquidity ratios collectively demonstrate a period of heightened liquidity at the end of 2015, followed by a gradual normalization to moderate, stable levels through 2017 and 2018. The sustained current and quick ratios above 2 and 1.5 respectively suggest adequate short-term financial health, while the relatively lower and more variable cash ratio indicates a cautious approach to cash holdings relative to liabilities. These patterns reflect possible strategic adjustments in working capital management after an initial liquidity peak.
Current Ratio
Halliburton Co., current ratio calculation (quarterly data)
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Current assets | 11,151) | 11,436) | 11,436) | 11,035) | 10,777) | 10,144) | 10,260) | 9,828) | 11,677) | 11,760) | 12,580) | 19,105) | 21,609) | 14,919) | 15,224) | 13,825) | |||||
| Current liabilities | 4,802) | 4,953) | 5,107) | 4,969) | 4,862) | 4,601) | 4,068) | 3,842) | 4,023) | 3,631) | 4,478) | 7,412) | 5,359) | 5,703) | 5,005) | 5,018) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Current ratio1 | 2.32 | 2.31 | 2.24 | 2.22 | 2.22 | 2.20 | 2.52 | 2.56 | 2.90 | 3.24 | 2.81 | 2.58 | 4.03 | 2.62 | 3.04 | 2.76 | |||||
| Benchmarks | |||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||
| SLB N.V. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q4 2018 Calculation
Current ratio = Current assets ÷ Current liabilities
= 11,151 ÷ 4,802 = 2.32
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibited notable fluctuations over the period analyzed. Starting at 13,825 million US dollars in March 2015, they increased steadily to a peak of 21,609 million US dollars by December 2015. Subsequently, a pronounced decline was observed during 2016, reaching lows around 11,677 million US dollars by the year-end. The trend stabilized in 2017 and 2018, with values oscillating slightly but generally maintaining a range between approximately 9,828 and 11,436 million US dollars.
- Current Liabilities
- Current liabilities showed some variability across the quarters. The initial values hovered around 5,000 million US dollars in early 2015, except for a sharp rise to 7,412 million US dollars in March 2016. Following this spike, liabilities steadily decreased to approximately 3,631 million US dollars by September 2016, then rose gradually again through the end of 2017 and into 2018, stabilizing around 4,800 to 5,100 million US dollars.
- Current Ratio
- The current ratio demonstrated significant oscillations, corresponding to movements in both current assets and liabilities. The ratio increased from 2.76 in March 2015 to a high of 4.03 by December 2015, driven by the peak in current assets and a relative plateau in liabilities. In 2016, the ratio fluctuated between 2.58 and 3.24, reflecting the decline in current assets and reduction in current liabilities. Throughout 2017 and 2018, the current ratio showed a generally declining trend, moving from 2.56 in March 2017 to around 2.22 to 2.32 by the end of 2018, indicating a tightening liquidity position relative to earlier periods.
- Summary
- Overall, the data reveals a period of volatility in short-term financial resources and obligations over the four-year span. The significant decrease in current assets after a peak at the end of 2015, accompanied by fluctuating but generally stable liabilities, influenced the liquidity as measured by the current ratio. While the current ratio remained above 2 throughout the entire period, suggesting a comfortable liquidity buffer, the downward trend towards the later years indicates a need for closer monitoring of working capital management and potential adjustments to maintain optimal liquidity levels.
Quick Ratio
Halliburton Co., quick ratio calculation (quarterly data)
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Cash and equivalents | 2,008) | 2,057) | 2,058) | 2,332) | 2,337) | 1,898) | 2,139) | 2,107) | 4,009) | 3,289) | 3,108) | 9,593) | 10,077) | 2,249) | 2,760) | 2,294) | |||||
| Marketable securities | —) | —) | 414) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||
| Receivables, net of allowances for bad debts | 5,234) | 5,526) | 5,403) | 5,255) | 5,036) | 4,852) | 4,385) | 4,008) | 3,922) | 4,360) | 4,725) | 4,983) | 5,317) | 5,791) | 5,633) | 6,419) | |||||
| Total quick assets | 7,242) | 7,583) | 7,875) | 7,587) | 7,373) | 6,750) | 6,524) | 6,115) | 7,931) | 7,649) | 7,833) | 14,576) | 15,394) | 8,040) | 8,393) | 8,713) | |||||
| Current liabilities | 4,802) | 4,953) | 5,107) | 4,969) | 4,862) | 4,601) | 4,068) | 3,842) | 4,023) | 3,631) | 4,478) | 7,412) | 5,359) | 5,703) | 5,005) | 5,018) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Quick ratio1 | 1.51 | 1.53 | 1.54 | 1.53 | 1.52 | 1.47 | 1.60 | 1.59 | 1.97 | 2.11 | 1.75 | 1.97 | 2.87 | 1.41 | 1.68 | 1.74 | |||||
| Benchmarks | |||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||
| SLB N.V. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q4 2018 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 7,242 ÷ 4,802 = 1.51
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in liquidity and balance sheet management over the four-year period.
- Total Quick Assets
- The total quick assets exhibit considerable fluctuations. Initially, there is a slight decline from approximately 8.7 billion US dollars at the beginning of 2015 through the third quarter of the same year. This is followed by a sharp increase peaking near 15.4 billion US dollars at the end of 2015. Subsequently, quick assets sharply decrease in the first half of 2016, falling below 8 billion US dollars and remaining fairly stable with minor fluctuations around the 7 to 8 billion mark through 2018. This pattern indicates an episodic accumulation of highly liquid assets towards the end of 2015, but a return to a lower and steadier level thereafter.
- Current Liabilities
- Current liabilities display a different trend. From early 2015 through the end of the year, there is a moderate increase from about 5.0 billion to roughly 7.4 billion US dollars at the first quarter of 2016. After this peak, liabilities sharply decline in the following two quarters, dropping to around 3.6 to 4.0 billion US dollars by the end of 2016. From 2017 onward, current liabilities gradually rise again, stabilizing near the 4.8 to 5.1 billion level through 2018. The data suggests a significant decrease in short-term obligations after the first quarter of 2016, followed by a steady increase thereafter.
- Quick Ratio
- The quick ratio reflects liquidity trends derived from the interaction of quick assets and current liabilities. The ratio starts at a high of 1.74 in early 2015, declines to a low of 1.41 in the third quarter of 2015, and then spikes sharply to 2.87 at the end of 2015. This peak corresponds with the surge in quick assets observed during the same quarter. Afterwards, the quick ratio fluctuates between 1.5 and 2.1, showing moderate stability from 2016 through 2018. The ratio remains comfortably above 1.5 for most periods, indicating an ability to cover current liabilities with liquid assets, though the sharp end-2015 peak is a notable anomaly.
Overall, the liquidity position as represented by quick assets and the quick ratio experienced unusual volatility around late 2015 and early 2016, possibly reflecting one-time operational or financial events. Following this period, both quick assets and liabilities stabilize at more moderate levels, with the quick ratio indicating consistent but less pronounced liquidity strength through 2017 and 2018. The current liabilities follow a similar pattern of peaking and subsequent reduction, suggesting active management of short-term obligations after mid-2016.
Cash Ratio
Halliburton Co., cash ratio calculation (quarterly data)
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Cash and equivalents | 2,008) | 2,057) | 2,058) | 2,332) | 2,337) | 1,898) | 2,139) | 2,107) | 4,009) | 3,289) | 3,108) | 9,593) | 10,077) | 2,249) | 2,760) | 2,294) | |||||
| Marketable securities | —) | —) | 414) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||
| Total cash assets | 2,008) | 2,057) | 2,472) | 2,332) | 2,337) | 1,898) | 2,139) | 2,107) | 4,009) | 3,289) | 3,108) | 9,593) | 10,077) | 2,249) | 2,760) | 2,294) | |||||
| Current liabilities | 4,802) | 4,953) | 5,107) | 4,969) | 4,862) | 4,601) | 4,068) | 3,842) | 4,023) | 3,631) | 4,478) | 7,412) | 5,359) | 5,703) | 5,005) | 5,018) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Cash ratio1 | 0.42 | 0.42 | 0.48 | 0.47 | 0.48 | 0.41 | 0.53 | 0.55 | 1.00 | 0.91 | 0.69 | 1.29 | 1.88 | 0.39 | 0.55 | 0.46 | |||||
| Benchmarks | |||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||
| SLB N.V. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q4 2018 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,008 ÷ 4,802 = 0.42
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable fluctuations in key liquidity metrics over the four-year period examined. The total cash assets, current liabilities, and cash ratio each exhibit distinct trends that provide insights into the company's short-term financial position.
- Total Cash Assets
- The total cash assets show considerable variability across quarters. Initially, there was a peak at the end of 2015 with cash assets reaching approximately 10,077 million US dollars, which significantly exceeded the preceding quarters. Following this peak, a marked decline occurred throughout 2016, hitting a trough around mid-2017 where cash assets fell below 2,100 million US dollars in certain quarters. From 2017 onwards, cash balances steadily fluctuated but remained lower relative to the peak of 2015, generally maintaining levels between 2,000 and 2,500 million US dollars.
- Current Liabilities
- Current liabilities remained relatively stable, with some variation between quarters. Early in the period, liabilities hovered near 5,000 million US dollars with an upward spike to approximately 7,412 million US dollars in March 2016. Following this spike, current liabilities decreased and stabilized in the range of 3,600 to 5,100 million US dollars through the remaining quarters. The data suggests a reduction in short-term obligations after early 2016, but with some gradual increases in the final years under review.
- Cash Ratio
- The cash ratio, which measures the company's ability to cover current liabilities with cash and cash equivalents, reflects considerable volatility. It reached an all-time high of 1.88 at the end of 2015, indicating strong liquidity during that period. Subsequently, the ratio declined sharply in 2016, falling below 1.00 in most quarters, and remained under 0.55 from 2017 through 2018. This consistent decline in the cash ratio suggests a diminishing capacity to meet short-term liabilities solely through available cash, indicating a weakening liquidity position over time.
In summary, the company experienced a liquidity peak at the end of 2015, characterized by high cash levels and current liabilities manageable through immediate cash resources. From 2016 onwards, both cash assets and the cash ratio declined, while current liabilities showed moderate stability with a slight downward trend. The sustained reduction in cash ratio during the latter years signals a potential concern regarding short-term liquidity strength, underscoring the need for careful monitoring of cash management and liability obligations.