Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Phillips 66, liquidity ratios (quarterly data)
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
- Current Ratio
- The current ratio demonstrates a general declining trend over the five-year period from March 2015 to December 2019. Starting at 1.64 in the first quarter of 2015, the ratio fluctuated moderately but gradually decreased, reaching a low of around 1.18 in September 2016. Although there were some recoveries, notably near the end of 2018 when it rose to 1.48, the ratio consistently stayed below the initial value and ended at 1.24 by December 2019. This suggests a reduction in short-term liquidity relative to current liabilities, indicating a more conservative liquidity position or potential tightening of working capital management.
- Quick Ratio
- The quick ratio generally mirrors the trend of the current ratio but at lower levels, reflecting a more stringent measure of liquidity. Initially, it was 1.13 in March 2015 and remained relatively stable in the early periods before experiencing a marked decline starting in 2016 to a low point of 0.73 in September of the same year. Post-2016, the ratio showed some recovery and volatility, with a noticeable peak at 1.05 in December 2017. From 2018 onward, the quick ratio tended to hover between 0.74 and 0.87, indicating a consistently tighter liquidity position excluding inventories. This pattern suggests periods of varying cash and receivables relative to current liabilities, with occasional improvements but no sustained return to earlier higher levels.
- Cash Ratio
- The cash ratio exhibited a pronounced decline over the observed period, reflecting a reduced level of actual cash and cash equivalents relative to current liabilities. Beginning at 0.55 in March 2015, the ratio consistently decreased and reached lows below 0.10 in parts of 2018, indicating a significant reduction in immediate liquidity available to cover short-term obligations. Although some rebound periods occurred, such as in late 2018 and early 2019 (around 0.34), the overall trajectory remained downward, ending at 0.14 by December 2019. This suggests a strategic move towards lower cash holdings or higher short-term liabilities, potentially reflecting efficient cash management or increased investment in operations requiring less liquid resources.
Current Ratio
Phillips 66, current ratio calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Current assets | 14,395) | 15,617) | 14,295) | 14,815) | 13,209) | 15,314) | 14,579) | 12,125) | 14,390) | 12,935) | 12,456) | 12,170) | 12,680) | 11,964) | 12,643) | 11,216) | 12,256) | 15,049) | 16,534) | 16,144) | ||||||
| Current liabilities | 11,646) | 12,083) | 11,171) | 11,328) | 8,935) | 11,974) | 11,732) | 9,236) | 10,107) | 9,905) | 8,874) | 8,730) | 9,463) | 10,100) | 10,400) | 7,419) | 7,531) | 8,875) | 10,075) | 9,864) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||||
| Current ratio1 | 1.24 | 1.29 | 1.28 | 1.31 | 1.48 | 1.28 | 1.24 | 1.31 | 1.42 | 1.31 | 1.40 | 1.39 | 1.34 | 1.18 | 1.22 | 1.51 | 1.63 | 1.70 | 1.64 | 1.64 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Occidental Petroleum Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
1 Q4 2019 Calculation
Current ratio = Current assets ÷ Current liabilities
= 14,395 ÷ 11,646 = 1.24
2 Click competitor name to see calculations.
- Current Assets
- Current assets demonstrate a fluctuating trend over the analyzed periods. Initially, from March 2015 to December 2015, there is a noticeable decline from 16,144 million USD to 12,256 million USD. This reduction reverses in the first half of 2016, with values rising to 12,680 million USD by December 2016. Subsequently, current assets exhibit a generally upward trajectory, reaching a peak of 15,314 million USD in September 2018 before declining and then recovering again towards the end of 2019, with values ending at 14,395 million USD. The data reveal periods of both contraction and growth in liquidity-related resources.
- Current Liabilities
- Current liabilities display a pattern of volatility with no consistent direction. Starting at 9,864 million USD in March 2015, liabilities rise and fall irregularly, peaking notably at 11,732 million USD in June 2018. After this peak, liabilities fluctuate but generally remain elevated compared to the initial periods, concluding at 11,646 million USD in December 2019. This indicates periods of increased short-term obligations, which may correspond with operational or financing activities influencing working capital needs.
- Current Ratio
- The current ratio, a key measure of short-term financial health, follows a downward trend over the time span observed. Beginning at 1.64 in March 2015, the ratio drops to a low of 1.18 in September 2016, implying reduced short-term liquidity coverage during that interval. Post-2016, the ratio partially recovers, oscillating between approximately 1.24 and 1.48 but does not regain previous higher levels consistently. By December 2019, the ratio settles at 1.24, lower than the initial figure in 2015. This overall decline suggests a relative tightening of current asset coverage against current liabilities, signaling potentially increased short-term liquidity risk or changes in asset and liability management strategies.
Quick Ratio
Phillips 66, quick ratio calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Cash and cash equivalents | 1,614) | 2,268) | 1,819) | 1,253) | 3,019) | 924) | 1,884) | 842) | 3,119) | 1,547) | 2,161) | 1,513) | 2,711) | 2,337) | 2,232) | 1,723) | 3,074) | 4,822) | 5,089) | 5,390) | ||||||
| Accounts and notes receivable, net of allowances | 7,376) | 6,097) | 5,748) | 6,476) | 5,414) | 6,840) | 6,006) | 5,399) | 6,424) | 5,421) | 4,750) | 4,979) | 5,485) | 4,101) | 4,610) | 3,991) | 4,411) | 4,315) | 5,377) | 4,717) | ||||||
| Accounts and notes receivable, related parties | 1,134) | 989) | 979) | 827) | 759) | 1,131) | 1,167) | 725) | 1,082) | 934) | 844) | 711) | 912) | 900) | 987) | 746) | 762) | 883) | 1,190) | 1,020) | ||||||
| Total quick assets | 10,124) | 9,354) | 8,546) | 8,556) | 9,192) | 8,895) | 9,057) | 6,966) | 10,625) | 7,902) | 7,755) | 7,203) | 9,108) | 7,338) | 7,829) | 6,460) | 8,247) | 10,020) | 11,656) | 11,127) | ||||||
| Current liabilities | 11,646) | 12,083) | 11,171) | 11,328) | 8,935) | 11,974) | 11,732) | 9,236) | 10,107) | 9,905) | 8,874) | 8,730) | 9,463) | 10,100) | 10,400) | 7,419) | 7,531) | 8,875) | 10,075) | 9,864) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||||
| Quick ratio1 | 0.87 | 0.77 | 0.77 | 0.76 | 1.03 | 0.74 | 0.77 | 0.75 | 1.05 | 0.80 | 0.87 | 0.83 | 0.96 | 0.73 | 0.75 | 0.87 | 1.10 | 1.13 | 1.16 | 1.13 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Occidental Petroleum Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
1 Q4 2019 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 10,124 ÷ 11,646 = 0.87
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends and fluctuations over the examined period. The total quick assets exhibit a general pattern of volatility, beginning at 11,127 million US dollars in early 2015 and declining to a low of 6,460 million by the first quarter of 2016. Subsequently, there is a recovery with fluctuations, reaching peaks over 9,000 million towards the end of 2016 and again in late 2017 and 2018, before fluctuating around the 8,500 to 10,100 million range in 2019.
Current liabilities show a differing trajectory, starting at 9,864 million US dollars in the first quarter of 2015 and demonstrating an upward trend overall. While there are some decreases, such as a dip in the last quarter of 2018, the trend reaches a high point of approximately 12,083 million by the third quarter of 2019. This indicates an increasing obligation level relative to the beginning of the period.
The quick ratio, which measures the company's liquidity by comparing quick assets to current liabilities, also fluctuates significantly. Initially, it stayed above 1.1 from early 2015 through late 2015, suggesting a strong liquidity position. However, beginning in 2016, the quick ratio fell below 1, reaching lows around 0.73 to 0.75 in the middle quarters of 2016 and again in certain quarters of 2018 and 2019, which indicates tighter liquidity conditions.
Notably, there are intermittent recoveries in the quick ratio to around or slightly above 1.0, observed in the last quarter of 2015, the last quarter of 2017, and the final quarter of 2018, signaling temporary improvements in short-term financial strength. Nevertheless, these gains appear to be short-lived, with a tendency to revert below 1.0 thereafter.
- Total Quick Assets
- Experience volatility with a significant decline in early 2016 followed by periods of recovery, but do not consistently return to the initial high levels from 2015.
- Current Liabilities
- Generally increase over the period, indicating rising short-term financial obligations, peaking in late 2018 and 2019.
- Quick Ratio
- Exhibit a declining trend from above 1.1 in 2015 to persistently below 1 from 2016 onward, reflecting tighter liquidity and decreased ability to cover current liabilities with quick assets.
Overall, these trends suggest a weakening liquidity position over the four-year span, with increasing current liabilities outpacing gains in quick assets. The intermittent recoveries in liquidity do not establish a sustainable improvement, pointing towards potential challenges in maintaining short-term financial stability. Monitoring and managing current liabilities and quick assets will be crucial to improving the quick ratio and overall liquidity profile going forward.
Cash Ratio
Phillips 66, cash ratio calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Cash and cash equivalents | 1,614) | 2,268) | 1,819) | 1,253) | 3,019) | 924) | 1,884) | 842) | 3,119) | 1,547) | 2,161) | 1,513) | 2,711) | 2,337) | 2,232) | 1,723) | 3,074) | 4,822) | 5,089) | 5,390) | ||||||
| Total cash assets | 1,614) | 2,268) | 1,819) | 1,253) | 3,019) | 924) | 1,884) | 842) | 3,119) | 1,547) | 2,161) | 1,513) | 2,711) | 2,337) | 2,232) | 1,723) | 3,074) | 4,822) | 5,089) | 5,390) | ||||||
| Current liabilities | 11,646) | 12,083) | 11,171) | 11,328) | 8,935) | 11,974) | 11,732) | 9,236) | 10,107) | 9,905) | 8,874) | 8,730) | 9,463) | 10,100) | 10,400) | 7,419) | 7,531) | 8,875) | 10,075) | 9,864) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||||
| Cash ratio1 | 0.14 | 0.19 | 0.16 | 0.11 | 0.34 | 0.08 | 0.16 | 0.09 | 0.31 | 0.16 | 0.24 | 0.17 | 0.29 | 0.23 | 0.21 | 0.23 | 0.41 | 0.54 | 0.51 | 0.55 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Occidental Petroleum Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
1 Q4 2019 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 1,614 ÷ 11,646 = 0.14
2 Click competitor name to see calculations.
- Total cash assets
- Over the analyzed period from March 2015 to December 2019, total cash assets exhibited notable fluctuations. Initially, cash assets declined steadily from 5,390 million US dollars in March 2015 to a low point of 1,513 million US dollars in March 2017. Following this trough, there was a recovery trend, with cash assets increasing to 3,119 million by December 2017. However, this recovery was intermittent, as subsequent values oscillated, reaching 3,019 million in December 2018 before declining again to 1,614 million by December 2019. The data indicates a pattern of volatility in cash holdings with no clear sustained upward or downward trend over the entire period.
- Current liabilities
- Current liabilities displayed moderate variation across the periods. Starting at 9,864 million US dollars in March 2015, liabilities peaked in mid-2018, reaching a high of 11,974 million in September 2018. Following this peak, liabilities showed some decline but remained relatively elevated, fluctuating between 11,328 million and 11,646 million in the latter part of 2019. Overall, the data reflect a tendency toward an increase in current liabilities over time, particularly after mid-2016.
- Cash ratio
- The cash ratio, which measures liquidity by comparing cash assets to current liabilities, demonstrated a general downward trend. Early values aligned with a moderate liquidity position, with ratios around 0.55 in March 2015. The ratio declined sharply through 2016 and 2017, reaching as low as 0.08 in September 2018, signaling reduced short-term liquidity coverage. Some recovery in the cash ratio was observed toward the end of 2018 and into 2019, though levels remained low, fluctuating between 0.11 and 0.19. This pattern suggests increasingly constrained liquidity relative to current liabilities over the time frame.