Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
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Liquidity Ratios (Summary)
Hess Corp., liquidity ratios
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Current Ratio
- The current ratio exhibits fluctuations over the analyzed period. Starting at a relatively strong level of 2.02 in 2018, it declined significantly to 1.26 in 2019, indicating a reduction in short-term liquidity. The ratio then improved markedly to 1.9 in 2020, before declining again to 1.42 in 2021. By 2022, there was a slight recovery to 1.64. These variations suggest periods of shifting liquidity management or working capital changes throughout the years.
- Quick Ratio
- The quick ratio shows a similar pattern to the current ratio but remains consistently lower, reflecting the exclusion of inventory from liquid assets. It started at 1.68 in 2018, dropped to 1.08 in 2019, recovered to 1.6 in 2020, and then steadily decreased to 1.28 in 2021 before rising again to 1.52 in 2022. This trend aligns with fluctuations in immediate liquidity but indicates generally sufficient quick asset coverage relative to current liabilities.
- Cash Ratio
- The cash ratio demonstrates more pronounced variability compared to the other liquidity measures, indicative of changes in cash and cash equivalents. Beginning at 1.22 in 2018, it fell sharply to 0.62 in 2019, reflecting a tighter cash position. The ratio then increased to 1.07 in 2020, suggesting improved cash reserves, before slightly declining to 0.89 in 2021. In 2022, it rose again to 1.04. The overall pattern points to active cash management with periods of both cautious and more relaxed cash holdings.
Current Ratio
Hess Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Current Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Current Ratio, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current assets
- Current assets show an initial decline from 4,459 million USD at the end of 2018 to 3,156 million USD in 2019, followed by a marginal decrease to 3,081 million USD in 2020. There is a notable increase in 2021 to 4,346 million USD, before a slight reduction to 3,931 million USD in 2022. This pattern indicates some volatility with a recovery phase occurring in 2021.
- Current liabilities
- Current liabilities increased from 2,203 million USD in 2018 to 2,510 million USD in 2019, then experienced a significant reduction to 1,623 million USD in 2020. However, liabilities subsequently grew sharply to 3,064 million USD in 2021, before settling down to 2,396 million USD in 2022. This suggests fluctuations in short-term obligations with a peak in 2021.
- Current ratio
- The current ratio starts at a healthy level of 2.02 in 2018, deteriorates substantially to 1.26 in 2019, then improves to 1.9 in 2020. It declines again in 2021 to 1.42 before rising to 1.64 in 2022. The ratio fluctuates but remains above 1.0 throughout, indicating the company generally maintains sufficient current assets to cover current liabilities, albeit with varying liquidity strength across the years.
- Summary
- Over the analyzed period, both current assets and current liabilities exhibit variability, with notable increases and decreases suggesting changes in working capital management or operational conditions. The current ratio mirrors these fluctuations, declining sharply in some years and recovering in others. Despite the volatility, the company consistently preserves a current ratio above 1.0, reflecting an overall capacity to meet short-term obligations. The variation in the ratio, however, signals fluctuating liquidity risk that may require attention to ensure stability in financial position.
Quick Ratio
Hess Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Accounts receivable | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Quick Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Quick Ratio, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets experienced a decline from 2018 to 2020, reaching the lowest point at 2,599 million US dollars in 2020. This was followed by a recovery in 2021, where the figure rose to 3,924 million US dollars, before decreasing again in 2022 to 3,648 million US dollars. The trend indicates some volatility in the availability of liquid assets over the five-year period.
- Current Liabilities
- Current liabilities showed a fluctuating pattern, initially increasing from 2,203 million US dollars in 2018 to 2,510 million US dollars in 2019. In 2020, there was a significant reduction to 1,623 million US dollars. Subsequently, liabilities increased sharply in 2021 to 3,064 million US dollars, then declined to 2,396 million US dollars in 2022. This suggests variability in short-term obligations, with a peak in 2021.
- Quick Ratio
- The quick ratio mirrored some of the fluctuations observed in quick assets and current liabilities. Starting at 1.68 in 2018, it dropped considerably to 1.08 in 2019. It then improved to 1.6 in 2020, declined again to 1.28 in 2021, and increased to 1.52 in 2022. Throughout the period, the quick ratio remained above 1, indicating that quick assets consistently exceeded current liabilities, suggesting liquidity was generally maintained despite the fluctuations.
- Overall Analysis
- The data reflects a financial profile characterized by variability in both liquid asset levels and short-term liabilities. The fluctuations in total quick assets and current liabilities impacted the quick ratio, but liquidity conditions stayed relatively stable as the quick ratio remained above 1 in all years. The sharp increases in current liabilities in 2019 and 2021, accompanied by decreases and recoveries in quick assets, point toward periods of increased financial obligations followed by efforts to restore liquid resource levels.
Cash Ratio
Hess Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| 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. | ||||||
| Cash Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Cash Ratio, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited notable fluctuations throughout the analyzed periods. In 2018, the cash assets were relatively high at 2,694 million US dollars but dropped sharply in 2019 to 1,545 million. There was a moderate recovery in 2020, with cash assets increasing to 1,739 million. A significant increase occurred in 2021, reaching 2,713 million, which is the highest level in the reported timeframe. However, in 2022, there was a slight decline to 2,486 million, though this value remained substantially above the levels observed in 2019 and 2020.
- Current Liabilities
- Current liabilities show variability without a clear directional trend. Starting from 2,203 million in 2018, they rose to 2,510 million in 2019 before decreasing sharply to 1,623 million in 2020. In 2021, current liabilities surged markedly to 3,064 million, representing the peak in the period, followed by a decrease to 2,396 million in 2022. These fluctuations suggest changes in short-term obligations, possibly reflecting shifts in operational or financing strategies.
- Cash Ratio
- The cash ratio, which measures the company's liquidity by comparing cash and cash equivalents to current liabilities, followed a pattern closely related to the movements in cash assets and current liabilities. In 2018, the ratio was at a healthy 1.22, indicating a surplus of cash relative to current liabilities. It fell significantly in 2019 to 0.62, signaling tighter liquidity conditions. The ratio improved in 2020 to 1.07, reflecting better liquidity, but then decreased again in 2021 to 0.89. In 2022, there was a recovery to 1.04, slightly exceeding the critical threshold of 1.0, implying that the company maintained a sufficient level of liquidity at year-end.
- Overall Insights
- The overall liquidity position of the company has been somewhat volatile over the five-year period but has shown resilience by ending with a cash ratio above 1.0 in 2022. While total cash assets peaked in 2021, the subsequent decline in 2022 warrants attention, though liquidity ratios suggest adequacy in coverage of current liabilities. The significant fluctuations in current liabilities year over year indicate variability in short-term financial obligations that could impact liquidity and operations. Maintaining a cash ratio around or above 1.0 in recent years suggests a conservative approach to liquidity risk management.