Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Geographic Areas
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Current Ratio since 2005
- Aggregate Accruals
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Liquidity Ratios (Summary)
National Oilwell Varco Inc., liquidity ratios (quarterly data)
Based on: 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), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
The analysis of the liquidity ratios over the reported periods reveals notable trends and fluctuations. These ratios provide insight into the company's short-term financial health and its ability to meet current liabilities.
- Current Ratio
- The current ratio shows a generally stable to slightly improving trend from March 2011 through June 2016. Starting at 2.6 in March 2011, it experienced minor fluctuations but maintained values generally above 2.0, indicating a consistent capacity to cover short-term liabilities with current assets. After a decline in the middle of 2012, the ratio increased steadily from late 2014 onward, reaching a peak of 3.12 by June 2016. This upward movement suggests an enhanced liquidity position in the later reporting periods.
- Quick Ratio
- The quick ratio exhibited more variability compared to the current ratio but remained above 1.0 in most periods, indicating that liquid assets excluding inventory were adequate to cover current liabilities. The lowest value occurred in June 2012 at 0.89, falling below the benchmark of 1.0, which could point to a temporary liquidity constraint. Following this, the ratio generally trended upward, with minor dips, and reached 1.26 by June 2016. This gradual recovery suggests improvement in readily available assets relative to liabilities after mid-2012.
- Cash Ratio
- The cash ratio, representing the most conservative liquidity measure, displayed the greatest volatility and the lowest values among the three ratios throughout the periods. It began at 0.74 in March 2011 and declined to a low of 0.3 during June and September 2012, indicating limited immediate cash availability during that time. Subsequently, the ratio recovered partially, fluctuating around 0.4 to 0.6 in later periods, and ended at 0.56 in June 2016. This suggests the company maintained a moderate level of cash or cash equivalents relative to current liabilities but experienced tighter cash liquidity especially around mid-2012.
Overall, the company demonstrated stable liquidity as per the current ratio, with some strain visible in the quick and cash ratios around mid-2012. The improvement of all three ratios toward the end of the data period indicates strengthening liquidity conditions, with the most conservative measures still reflecting cautious cash management practices.
Current Ratio
National Oilwell Varco Inc., current ratio calculation (quarterly data)
| 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 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
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| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Current ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 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), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the liquidity position over the observed periods.
- Current Assets
- Current assets exhibited a general upward trend from March 31, 2011, reaching a peak in December 31, 2012. Specifically, the value rose from 10,739 million US dollars to a high of 15,678 million US dollars during this timeframe. Following this peak, there was a gradual decline in current assets through June 30, 2016, dropping to 9,204 million US dollars. This decline suggests a reduction in liquid or near-liquid resources available to the company in more recent periods.
- Current Liabilities
- Current liabilities also increased from 4,132 million US dollars on March 31, 2011, peaking earlier around June 30, 2012, at 6,481 million US dollars. Subsequent to this peak, current liabilities generally trended downward, falling significantly to 2,947 million US dollars by June 30, 2016. This reduction in current liabilities indicates an improvement in short-term obligations over the later years within the dataset.
- Current Ratio
- The current ratio demonstrated variability but remained above 2.0 throughout the observed periods, indicating a generally comfortable short-term liquidity position. Initially, it showed a gradual decrease from 2.6 in March 2011 to a low of 2.01 in June 2012, coinciding with the period of increasing liabilities and rising assets. After this low point, the ratio recovered, reaching a peak of 3.12 by June 30, 2016. The increasing trend in the current ratio in the later periods is largely attributable to the decreasing current liabilities combined with a less steep decline in current assets, enhancing the company's ability to cover its short-term liabilities.
In summary, the period until late 2012 was characterized by growth in both current assets and liabilities, leading to a downward trend in the current ratio. Post-2012, a strategic improvement in managing liabilities, accompanied by gradually decreasing current assets, resulted in a strengthening liquidity position as reflected in the increasing current ratio through mid-2016. This suggests an improved short-term financial stability in the latest quarters of the dataset.
Quick Ratio
National Oilwell Varco Inc., quick ratio calculation (quarterly data)
| 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 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||||||||
| Receivables, net | |||||||||||||||||||||||||||||
| Total quick assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Quick ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 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), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in liquidity and short-term financial stability.
- Total quick assets
- The total quick assets fluctuate over the analyzed periods, starting at 5,817 million US dollars in March 2011, generally increasing with some volatility to a peak of 8,998 million in March 2014. After this peak, there is a noticeable decline, dropping steadily to 3,705 million by June 2016. This trend indicates an initial strengthening in liquid assets followed by a significant reduction in the latter periods.
- Current liabilities
- Current liabilities show an overall increasing trend from 4,132 million US dollars in March 2011 to a peak of 7,374 million in December 2014. Following this peak, liabilities decrease substantially to 2,947 million by June 2016. This pattern suggests increasing short-term obligations until late 2014, after which the company appears to reduce its liabilities considerably.
- Quick ratio
- The quick ratio starts at a strong 1.41 in March 2011 and remains relatively stable around 1.2 to 1.3 until early 2014, indicating sufficient liquid asset coverage over current liabilities. However, it experiences a dip to a low of 0.89 in June 2012 amid a period of fluctuating quick assets and rising liabilities, reflecting a short-term liquidity stress. Subsequently, the quick ratio recovers above 1.0 through 2013 and 2014, but then declines again to approximately 1.0 or slightly below during late 2014 and 2015, before improving slightly to around 1.16 by mid-2016.
- Summary of trends
- The data show a cycle of accumulation and depletion of quick assets alongside corresponding fluctuations in current liabilities. Early on, the company maintained a comfortable liquidity position with quick ratios above 1.2, despite short-term volatility. The mid-2012 dip in quick ratio suggests a period of tighter liquidity conditions. The peak in liabilities and quick assets around late 2013 to early 2014 corresponds to a high liquidity coverage ratio. After this period, the company reduced both liabilities and quick assets, which brought the quick ratio closer to parity but generally maintained around 1.0, indicating a balanced liquidity position without excessive buffer.
Cash Ratio
National Oilwell Varco Inc., cash ratio calculation (quarterly data)
| 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 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||||||||
| Total cash assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Cash ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 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), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The quarterly financial data reveals several notable trends relating to liquidity and short-term obligations over the observed periods.
- Total Cash Assets
- Total cash assets demonstrate a fluctuating pattern throughout the period. There is an initial increase from March 2011 (3,060 million US$) reaching a peak in September 2011 (3,870 million US$), followed by a decline towards mid-2012, hitting a low in September 2012 (1,702 million US$). A recovery phase is observed until the end of 2014, peaking at 4,091 million US$ in September 2014, after which a gradual downward trend resumes into mid-2016, reaching 1,661 million US$. This suggests variations in cash management or operational inflows and outflows over time.
- Current Liabilities
- Current liabilities exhibit a consistent upward trend from March 2011 (4,132 million US$) to December 2014 (7,374 million US$). Post this peak, a clear downward movement is noted, declining to 2,947 million US$ by June 2016. The initial increase suggests growing short-term obligations, possibly driven by expanded operations or financing needs, while the subsequent decrease may indicate efforts toward liability reduction or improved cash flow management.
- Cash Ratio
- The cash ratio, representing liquidity coverage of current liabilities by cash assets, shows significant volatility. Beginning at 0.74 in March 2011, the ratio improves slightly to 0.82 by September 2011 but then declines sharply to a low of 0.30 in mid-2012. An upward recovery to approximately 0.57 occurs in late 2014, followed by a downward oscillation, concluding at 0.56 in June 2016. Overall, the periods of lower cash ratios coincide with peaks in current liabilities and troughs in cash assets, indicating constrained liquidity during those intervals.
In summary, the data reflects a dynamic liquidity profile marked by cyclical fluctuations in cash reserves and concurrent changes in short-term debt. The interplay between increasing current liabilities and varying cash assets has a direct impact on the cash ratio, with periods of liquidity risk evident in mid-2012 and again in the mid-2015 timeframe. The gradual improvement in the cash ratio toward the end of the dataset may suggest strategic adjustments to enhance short-term financial stability.