Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Occidental Petroleum Corp., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 0.95 | 0.92 | 1.15 | 1.23 | 1.07 | |
| Quick ratio | 0.67 | 0.60 | 0.68 | 0.84 | 0.50 | |
| Cash ratio | 0.22 | 0.16 | 0.13 | 0.33 | 0.24 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The liquidity position of the organization has exhibited significant volatility over the five-year period ending December 31, 2024. While there was an initial improvement in liquidity metrics peaking in 2021, a subsequent contraction occurred, particularly in 2023, followed by a marginal recovery in 2024.
- Current Ratio
- A peak value of 1.23 was recorded in 2021, indicating a strong ability to cover short-term obligations. However, a downward trend followed, with the ratio falling below the critical 1.0 threshold in 2023 (0.92) and remaining slightly below parity in 2024 (0.95). This suggests a tightening of working capital where current liabilities have begun to exceed current assets.
- Quick Ratio
- The quick ratio mirrors the trajectory of the current ratio, reaching a maximum of 0.84 in 2021 before declining to 0.60 by 2023. A slight recovery to 0.67 was observed in 2024. The consistent gap between the current and quick ratios indicates that a substantial portion of current assets is tied up in less liquid components, such as inventories.
- Cash Ratio
- The cash ratio experienced a notable decline from 0.33 in 2021 to a low of 0.13 in 2022. Since that trough, a steady upward trend has been observed, with the ratio increasing to 0.16 in 2023 and 0.22 in 2024. This suggests a gradual rebuilding of the most liquid asset reserves relative to short-term debt.
Overall, the data indicates a period of liquidity stress that peaked in 2023. Although the current ratio remains below 1.0, the simultaneous recovery in the cash and quick ratios during 2024 suggests an improving trend in the organization's immediate solvency capacity.
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Current Ratio
Occidental Petroleum Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 9,070) | 8,375) | 8,886) | 10,211) | 8,819) | |
| Current liabilities | 9,521) | 9,148) | 7,757) | 8,324) | 8,223) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 0.95 | 0.92 | 1.15 | 1.23 | 1.07 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | 1.06 | 1.27 | 1.47 | 1.26 | — | |
| ConocoPhillips | 1.29 | 1.43 | 1.46 | 1.34 | — | |
| Exxon Mobil Corp. | 1.31 | 1.48 | 1.41 | 1.04 | — | |
| Current Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.23 | 1.41 | 1.44 | 1.14 | — | |
| Current Ratio, Industry | ||||||
| Energy | 1.25 | 1.40 | 1.42 | 1.15 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 9,070 ÷ 9,521 = 0.95
2 Click competitor name to see calculations.
The analysis of short-term liquidity indicates a period of strengthening followed by a gradual decline in the capacity to cover immediate obligations. While the liquidity position peaked in 2021, a subsequent shift toward a more constrained state is evident by the end of the 2024 period.
- Current Assets Trend
- Current assets exhibited volatility over the five-year span. A peak of 10,211 million US$ was recorded in 2021, followed by a contraction to 8,375 million US$ by 2023. A moderate recovery was observed in 2024, with assets increasing to 9,070 million US$.
- Current Liabilities Trend
- Current liabilities remained relatively stable between 2020 and 2022, reaching a period low of 7,757 million US$ in 2022. However, a notable upward trajectory emerged in 2023 and 2024, with obligations rising to 9,521 million US$ by the end of 2024.
- Current Ratio Interpretation
- The current ratio peaked at 1.23 in 2021, indicating a comfortable margin of liquidity. This figure declined steadily thereafter, dropping below the critical 1.0 threshold in 2023 (0.92) and remaining below that level in 2024 (0.95). The transition to a ratio below 1.0 signifies that current liabilities now exceed current assets, reflecting a tighter liquidity position compared to the 2020-2022 window.
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Quick Ratio
Occidental Petroleum Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 2,132) | 1,426) | 984) | 2,764) | 2,008) | |
| Trade receivables, net of reserves | 3,526) | 3,195) | 4,281) | 4,208) | 2,115) | |
| Joint interest receivables | 720) | 902) | —) | —) | —) | |
| Total quick assets | 6,378) | 5,523) | 5,265) | 6,972) | 4,123) | |
| Current liabilities | 9,521) | 9,148) | 7,757) | 8,324) | 8,223) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.67 | 0.60 | 0.68 | 0.84 | 0.50 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.71 | 0.87 | 1.12 | 0.90 | — | |
| ConocoPhillips | 1.06 | 1.21 | 1.27 | 1.10 | — | |
| Exxon Mobil Corp. | 0.95 | 1.06 | 1.03 | 0.69 | — | |
| Quick Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.88 | 1.02 | 1.09 | 0.80 | — | |
| Quick Ratio, Industry | ||||||
| Energy | 0.89 | 1.01 | 1.06 | 0.80 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 6,378 ÷ 9,521 = 0.67
2 Click competitor name to see calculations.
The liquidity position of the entity, as evidenced by the quick ratio, exhibits significant volatility between 2020 and 2024, consistently remaining below the 1.0 threshold. This indicates that liquid assets were insufficient to cover total current liabilities throughout the analyzed period.
- Quick Ratio Trend
- A sharp improvement is observed between 2020 and 2021, where the ratio rose from 0.50 to a peak of 0.84. This was followed by a two-year decline, reaching a low of 0.60 in 2023, before a modest recovery to 0.67 was recorded by the end of 2024.
- Quick Assets Dynamics
- Total quick assets experienced a substantial increase from US$ 4,123 million in 2020 to US$ 6,972 million in 2021. Despite a subsequent dip to US$ 5,265 million in 2022, a consistent upward trend followed, with assets growing to US$ 6,378 million by December 31, 2024.
- Current Liabilities Trajectory
- Current liabilities remained relatively stable between 2020 and 2022, fluctuating within a narrow range. However, a notable expansion in short-term obligations occurred from 2023 onward, with liabilities increasing from US$ 7,757 million in 2022 to US$ 9,521 million in 2024, thereby offsetting gains in quick assets and limiting the recovery of the quick ratio.
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Cash Ratio
Occidental Petroleum Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 2,132) | 1,426) | 984) | 2,764) | 2,008) | |
| Total cash assets | 2,132) | 1,426) | 984) | 2,764) | 2,008) | |
| Current liabilities | 9,521) | 9,148) | 7,757) | 8,324) | 8,223) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.22 | 0.16 | 0.13 | 0.33 | 0.24 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.18 | 0.25 | 0.52 | 0.21 | — | |
| ConocoPhillips | 0.50 | 0.66 | 0.72 | 0.55 | — | |
| Exxon Mobil Corp. | 0.33 | 0.48 | 0.43 | 0.12 | — | |
| Cash Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.30 | 0.43 | 0.49 | 0.20 | — | |
| Cash Ratio, Industry | ||||||
| Energy | 0.30 | 0.42 | 0.47 | 0.21 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,132 ÷ 9,521 = 0.22
2 Click competitor name to see calculations.
The cash ratio exhibits a volatile trajectory between 2020 and 2024, characterized by a significant contraction in 2022 followed by a steady recovery. This fluctuation reflects shifts in the company's immediate liquidity position relative to its short-term obligations.
- Cash Asset Volatility
- Total cash assets experienced an initial increase, peaking at US$ 2,764 million in 2021. This was followed by a sharp decline to US$ 984 million in 2022. From 2023 onward, a recovery trend is observed, with cash assets rising to US$ 1,426 million and subsequently to US$ 2,132 million by the end of 2024.
- Current Liability Trends
- Short-term obligations remained relatively stable from 2020 through 2022, fluctuating between US$ 7,757 million and US$ 8,324 million. However, a sustained upward trend emerged in the latter part of the period, with current liabilities increasing to US$ 9,148 million in 2023 and reaching US$ 9,521 million in 2024.
- Cash Ratio Interpretation
- The cash ratio improved from 0.24 in 2020 to a peak of 0.33 in 2021. A substantial drop to 0.13 occurred in 2022, coinciding with the sharp decrease in cash assets. Although the ratio recovered to 0.16 in 2023 and 0.22 in 2024, the growth was partially offset by the simultaneous increase in current liabilities. Consequently, the 2024 liquidity position remains slightly below the level observed in 2020.
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