Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
LyondellBasell Industries N.V., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 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), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
- Current Ratio
- The current ratio demonstrates a gradual decline over the analyzed period. Starting at 2.62 in the first quarter of 2014, the ratio decreases steadily and reaches a lower bound of 1.47 by mid-2019. There are minor fluctuations around the years 2017 and 2018, with a slight recovery to 2.46 at the end of 2017 and 2.62 in early 2018, but the overall trend resumes downward thereafter. This indicates a diminishing ability to cover short-term obligations with current assets over the time frame examined.
- Quick Ratio
- The quick ratio follows a similarly declining trend. Initially recorded at 1.44 in early 2014, it experiences a steady decrease with some temporary improvements, peaking around 1.33 at the end of 2017. After this peak, the ratio declines more sharply, reaching 0.68 by mid-2019. This decline implies a reduction in liquid assets available to meet immediate liabilities, excluding inventory, signaling tightening liquidity conditions.
- Cash Ratio
- The cash ratio shows a marked decrease over the years. Beginning at 0.72 in the first quarter of 2014, the ratio oscillates moderately until the start of 2018, but overall diminishes significantly as it drops to 0.18 by mid-2019. This pronounced downturn reflects a weakening position in terms of cash and cash equivalents in relation to current liabilities, suggesting constrained cash availability for near-term financial obligations.
Current Ratio
LyondellBasell Industries N.V., current ratio calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | 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 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | ||||||||
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| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Current ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 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), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
1 Q2 2019 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several important trends in the short-term liquidity position over the examined periods.
- Current Assets
- Current assets generally exhibit a declining trend from early 2014 to late 2016, decreasing from approximately 14,993 million USD to around 9,599 million USD. From early 2017 onwards, there is a modest recovery and slight growth, reaching peaks above 12,000 million USD in mid-2018, before declining again towards mid-2019 to levels near 11,000 million USD.
- Current Liabilities
- Current liabilities display a more variable pattern. Initial values in 2014 are near 5,700 million USD, with a downward shift in 2015 and 2016 to approximately 4,300-4,500 million USD. However, starting in 2017, current liabilities trend upwards substantially, reaching a peak of roughly 7,500 million USD by mid-2019. This increase in liabilities corresponds with the periods where current assets experience less pronounced growth.
- Current Ratio
- The current ratio exhibits a consistent downward trajectory throughout the period. Early values in 2014 start at a strong liquidity position near 2.6, indicating that current assets were more than twice current liabilities. This ratio steadily declines year over year, falling below 2.0 in late 2018 and stabilizing around 1.47 by mid-2019. The declining current ratio reflects a diminishing short-term liquidity buffer, driven by the combination of decreasing current assets and increasing current liabilities in later periods.
Overall, the data suggest that the company’s liquidity position weakened over the timeframe considered. While current assets showed fluctuations with an initial decline and partial recovery, the steadily rising current liabilities and the consequent decrease in the current ratio highlight a potential rise in short-term financial risk. This may warrant closer attention to working capital management and liquidity planning going forward.
Quick Ratio
LyondellBasell Industries N.V., quick ratio calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | 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 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||||||||
| Restricted cash | |||||||||||||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||||||||
| Accounts receivable | |||||||||||||||||||||||||||||
| Total quick assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Quick ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 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), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
1 Q2 2019 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets demonstrate a fluctuating pattern with a general downward trend from early 2014 to late 2015, declining from 8,248 million US dollars in March 2014 to a low of 4,512 million US dollars in December 2015. Following this period, there is a moderate recovery observed through 2016 and 2017, reaching a peak of 6,374 million US dollars in December 2017. After this peak, values again decline gradually into 2018 and 2019, with the lowest values appearing in the final reported quarters, notably 4,461 and 4,518 million US dollars. The data indicates volatility with periods of recovery interspersed with declines, reflecting variability in the company's liquid asset base.
- Current liabilities
- Current liabilities remain relatively stable during early to mid-2014, fluctuating between 5,720 and 5,628 million US dollars. A notable decrease occurs starting in late 2014 through 2015, with liabilities dropping to 4,349 million US dollars by December 2015. From 2016 onward, current liabilities tend to increase consistently, reaching a peak of 7,538 million US dollars in June 2019. This upward trend in current liabilities during these later periods suggests an increase in short-term financial obligations.
- Quick ratio
- The quick ratio follows a generally declining trend over the entire period, starting from a relatively strong position of 1.44 in March 2014 and decreasing to below 1.0 beginning early 2018. Notably, it dips to 0.64 by March 2019, the lowest ratio observed during the timeframe. Periods of minor recovery are visible, particularly during 2016 and 2017 when the ratio fluctuates between 1.07 and 1.47 before the subsequent decline. The drop in the quick ratio below one in recent quarters suggests the company’s liquid assets are less than its current liabilities, indicating potentially strained short-term liquidity.
- Overall insights
- The analysis indicates decreasing liquidity over time, driven both by a reduction in total quick assets and an increase in current liabilities. The quick ratio's decline below one in recent periods is particularly significant as it reflects a potential challenge in meeting immediate obligations with readily available assets. The periodic recovery in assets and ratios suggests occasional improvement in liquidity, but these gains were insufficient to counteract the overall downward trend. The increasing current liabilities combined with fluctuating liquid assets may necessitate closer scrutiny of working capital management and short-term financial strategies.
Cash Ratio
LyondellBasell Industries N.V., cash ratio calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | 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 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||||||||
| Restricted cash | |||||||||||||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||||||||
| Total cash assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Cash ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 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), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
1 Q2 2019 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends concerning liquidity and short-term obligations over the examined period.
- Total Cash Assets
- The total cash assets exhibit a general decline from early 2014 through 2019, with noticeable fluctuations within the quarters. Starting at US$ 4,107 million in March 2014, the cash assets decreased progressively with some intermittent recoveries towards the end of 2017, reaching highs near US$ 2,835 million in December 2017. However, a sharp drop is observable beginning in 2018, culminating in a low of US$ 781 million by September 2019, before a slight uptick to US$ 1,360 million in June 2019.
- Current Liabilities
- Current liabilities remained relatively stable from 2014 through mid-2015, oscillating around the US$ 5,000 to 5,700 million range. Starting from late 2015, there is a moderate increase observed, peaking in June 2019 at US$ 7,538 million. This overall upward trend in current liabilities indicates rising short-term obligations over the period.
- Cash Ratio
- The cash ratio, reflecting the company's ability to cover current liabilities with its immediate cash assets, mirrors the trends in cash and liabilities, showing a general decline over the time span. From a strong position of 0.72 in March 2014, the ratio fell notably to around 0.24 by March 2019, reaching an even lower point of 0.11 in September 2019. This decline highlights a decreasing liquidity cushion relative to current liabilities. The ratio indicates periods of slightly improved liquidity around 2017 and early 2018 but then deteriorates significantly in the subsequent years.
Overall, the data suggest that over the five-year horizon, the company's liquidity position weakened, characterized by reduced cash reserves and increased current liabilities, resulting in a substantial decline in the cash ratio. This trend points to potential challenges in covering short-term debts strictly with cash assets, warranting attention to liquidity management strategies.