Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
ONEOK Inc., liquidity ratios
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Current ratio | 0.83 | 0.75 | 1.39 | 0.73 | 0.66 | |
| Quick ratio | 0.57 | 0.50 | 1.01 | 0.42 | 0.39 | |
| Cash ratio | 0.07 | 0.05 | 0.39 | 0.01 | 0.01 |
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 exhibited notable fluctuations over the assessed five-year period. Starting at 0.66 in 2018, the ratio improved slightly to 0.73 in 2019, followed by a significant increase to 1.39 in 2020. However, this peak was not sustained, as the ratio then declined sharply to 0.75 in 2021 and experienced a modest rise to 0.83 in 2022. Overall, this suggests a fluctuation in short-term liquidity, with the highest level observed in 2020 indicating a period of stronger ability to cover current liabilities with current assets. The lower ratios in other years indicate comparatively tighter liquidity positions.
- Quick Ratio
-
The quick ratio followed a similar pattern to the current ratio during the period under analysis. It commenced at 0.39 in 2018, increased marginally to 0.42 in 2019, and then rose significantly to 1.01 in 2020. This was followed by a decrease to 0.50 in 2021 and a subsequent increase to 0.57 in 2022. The sharp increase in 2020 indicates a substantial enhancement in the company's liquid assets excluding inventory, showcasing an improved ability to meet short-term obligations without relying on inventory sales. The decline afterwards suggests a reversion to more constrained liquidity in the subsequent years.
- Cash Ratio
-
The cash ratio remained very low throughout the period but displayed a noticeable peak in 2020. The ratio was at 0.01 in both 2018 and 2019, surged to 0.39 in 2020, then dropped to 0.05 in 2021 and slightly rose to 0.07 in 2022. Despite this increase in 2020, the cash ratio values over the period indicate a generally limited amount of cash and cash equivalents relative to current liabilities. The spike in 2020 may reflect a temporary accumulation of cash or highly liquid assets during that year, possibly linked to broader market or operational circumstances.
Current Ratio
ONEOK Inc., 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 thousands) | ||||||
| Current assets | 2,547,775) | 2,374,374) | 1,869,775) | 1,470,334) | 1,398,632) | |
| Current liabilities | 3,051,627) | 3,184,619) | 1,344,547) | 2,020,298) | 2,108,436) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 0.83 | 0.75 | 1.39 | 0.73 | 0.66 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | 1.47 | 1.26 | 1.18 | — | — | |
| ConocoPhillips | 1.46 | 1.34 | 2.25 | — | — | |
| Exxon Mobil Corp. | 1.41 | 1.04 | 0.80 | — | — | |
| Occidental Petroleum Corp. | 1.15 | 1.23 | 1.07 | — | — | |
| Current Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.42 | 1.15 | 1.00 | — | — | |
| Current Ratio, Industry | ||||||
| Energy | 1.40 | 1.15 | 1.02 | — | — | |
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
= 2,547,775 ÷ 3,051,627 = 0.83
2 Click competitor name to see calculations.
- Current Assets
- The current assets demonstrate a consistent upward trend from 2018 through 2022. Beginning at approximately 1.40 billion in 2018, the figure increased steadily each year, reaching around 2.55 billion by the end of 2022. The most notable increases occurred between 2019 and 2021, where the asset base expanded significantly, suggesting an improvement in liquidity or greater investment in short-term resources.
- Current Liabilities
- Current liabilities show a more variable pattern over the same period. Starting at roughly 2.11 billion in 2018, liabilities slightly declined in 2019 and then significantly dropped to about 1.34 billion in 2020. However, in 2021, current liabilities surged sharply to over 3.18 billion before decreasing moderately in 2022 to approximately 3.05 billion. This volatility indicates fluctuations in the company's short-term obligations and possible changes in financing or operating activities.
- Current Ratio
- The current ratio reflects the relationship between current assets and current liabilities, revealing the company's short-term financial health. The ratio was below 1.0 in 2018 and 2019, at 0.66 and 0.73 respectively, indicating potential liquidity concerns. In 2020, the ratio rose markedly to 1.39, reflecting a period when current assets exceeded current liabilities, suggesting improved liquidity. However, this improvement was not sustained, as the ratio declined again to 0.75 in 2021 and slightly improved to 0.83 in 2022. Despite these fluctuations, the ratio remained below the ideal benchmark of 1.0 in most years, implying ongoing short-term liquidity risks.
Quick Ratio
ONEOK Inc., 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 thousands) | ||||||
| Cash and cash equivalents | 220,227) | 146,391) | 524,496) | 20,958) | 11,975) | |
| Accounts receivable, net | 1,532,292) | 1,441,786) | 829,796) | 835,121) | 818,958) | |
| Total quick assets | 1,752,519) | 1,588,177) | 1,354,292) | 856,079) | 830,933) | |
| Current liabilities | 3,051,627) | 3,184,619) | 1,344,547) | 2,020,298) | 2,108,436) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.57 | 0.50 | 1.01 | 0.42 | 0.39 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | 1.12 | 0.90 | 0.77 | — | — | |
| ConocoPhillips | 1.27 | 1.10 | 1.98 | — | — | |
| Exxon Mobil Corp. | 1.03 | 0.69 | 0.44 | — | — | |
| Occidental Petroleum Corp. | 0.68 | 0.84 | 0.50 | — | — | |
| Quick Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.06 | 0.80 | 0.62 | — | — | |
| Quick Ratio, Industry | ||||||
| Energy | 1.04 | 0.81 | 0.63 | — | — | |
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
= 1,752,519 ÷ 3,051,627 = 0.57
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets increased steadily over the period from December 31, 2018 to December 31, 2022. Starting at $830,933 thousand in 2018, the figure rose moderately to $856,079 thousand in 2019 before experiencing a significant jump to $1,354,292 thousand in 2020. This upward trend continued through 2021 and 2022, reaching $1,588,177 thousand and $1,752,519 thousand respectively. This consistent increase indicates improved liquidity in terms of quick assets available for covering immediate obligations.
- Current Liabilities
- Current liabilities exhibited a fluctuating pattern during the same period. Initially, a slight decrease was observed from $2,108,436 thousand in 2018 to $2,020,298 thousand in 2019, followed by a notable reduction to $1,344,547 thousand in 2020. However, this was succeeded by a sharp increase to $3,184,619 thousand in 2021, before decreasing marginally to $3,051,627 thousand in 2022. The volatility in current liabilities suggests varying short-term obligations, which may reflect changes in operational or financing activities.
- Quick Ratio
- The quick ratio demonstrated significant variation throughout the timeframe. It began at a low level of 0.39 in 2018 and increased slightly to 0.42 in 2019. A marked improvement occurred in 2020, as the quick ratio rose to 1.01, indicating that quick assets exceeded current liabilities at that point. Subsequently, the ratio declined to 0.50 in 2021 and then modestly increased to 0.57 in 2022. Despite the improvement in quick assets, the decreasing quick ratio after 2020 suggests that current liabilities grew disproportionately, reducing short-term liquidity coverage.
Cash Ratio
ONEOK Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 220,227) | 146,391) | 524,496) | 20,958) | 11,975) | |
| Total cash assets | 220,227) | 146,391) | 524,496) | 20,958) | 11,975) | |
| Current liabilities | 3,051,627) | 3,184,619) | 1,344,547) | 2,020,298) | 2,108,436) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.07 | 0.05 | 0.39 | 0.01 | 0.01 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.52 | 0.21 | 0.25 | — | — | |
| ConocoPhillips | 0.72 | 0.55 | 1.46 | — | — | |
| Exxon Mobil Corp. | 0.43 | 0.12 | 0.08 | — | — | |
| Occidental Petroleum Corp. | 0.13 | 0.33 | 0.24 | — | — | |
| Cash Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.47 | 0.21 | 0.22 | — | — | |
| Cash Ratio, Industry | ||||||
| Energy | 0.45 | 0.22 | 0.22 | — | — | |
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
= 220,227 ÷ 3,051,627 = 0.07
2 Click competitor name to see calculations.
- Cash assets
- The total cash assets experienced significant fluctuations over the observed period. Initially, cash assets increased moderately from 11,975 thousand USD at the end of 2018 to 20,958 thousand USD in 2019. This was followed by a remarkable surge in 2020, reaching 524,496 thousand USD. However, this peak was not sustained, as cash assets subsequently declined to 146,391 thousand USD in 2021, with a moderate recovery to 220,227 thousand USD by the end of 2022.
- Current liabilities
- Current liabilities demonstrated a decreasing trend from 2,108,436 thousand USD at the end of 2018 to a low of 1,344,547 thousand USD in 2020. This trend reversed sharply in 2021, with current liabilities more than doubling to 3,184,619 thousand USD, and remained elevated at 3,051,627 thousand USD in 2022.
- Cash ratio
- The cash ratio, representing the short-term liquidity position, remained very low in 2018 and 2019 at approximately 0.01, indicating minimal cash relative to current liabilities. There was a substantial increase in 2020 to 0.39, reflecting the large increase in cash assets and reduction in liabilities. However, this improvement was temporary; the ratio then fell to 0.05 in 2021 and modestly rose to 0.07 in 2022, signaling a return to relatively low liquidity levels compared to liabilities.
- Summary of Trends
- The data reveals significant volatility in liquidity and liabilities over the five-year period. The exceptional spike in cash assets and the corresponding improvement in the cash ratio in 2020 appears to be an anomaly relative to otherwise low liquidity measures. The sharp increase in current liabilities in 2021 indicates a shift toward greater short-term obligations, which was not fully supported by cash reserves by the end of 2022. Overall, the organization’s liquidity position remains constrained, with current liabilities consistently far exceeding readily available cash.