Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Income Statement
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Liquidity Ratios (Summary)
United States Steel Corp., liquidity ratios
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
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 exhibits a consistent upward trend over the five-year period, increasing from 1.51 at the end of 2018 to 1.99 by the end of 2022. This trend indicates a strengthening liquidity position, with the company progressively improving its ability to cover short-term liabilities with its current assets.
- Quick Ratio
- The quick ratio follows a similar ascending pattern, starting at 0.83 in 2018 and rising steadily to 1.30 by 2022. The increase is particularly notable between 2019 and 2020, where the ratio jumps from 0.73 to 1.12. This suggests an enhancement in the company's capacity to meet short-term obligations without relying on inventory, reflecting improved liquidity quality.
- Cash Ratio
- The cash ratio shows more variability but an overall positive trend, moving from 0.31 in 2018 to 0.89 in 2022. After a slight decline from 0.31 in 2018 to 0.29 in 2019, there is a significant increase in 2020 to 0.75, followed by a marginal drop in 2021 to 0.65, and then an increase again in 2022. This pattern indicates fluctuating but generally improving immediate liquidity, signaling enhanced availability of cash or cash equivalents to cover current liabilities.
- Summary
- All three liquidity ratios demonstrate a strengthening liquidity position over the analyzed period. The progressive increase across these measures suggests that the company has been successful in bolstering its short-term financial health, with increasing ability to meet current liabilities promptly. The quick and cash ratios' improvement particularly points to enhanced quality and immediacy of liquid assets.
Current Ratio
United States Steel Corp., 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 millions) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Current Ratio, Industry | ||||||
| Materials | ||||||
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 Click competitor name to see calculations.
- Current Assets
- Current assets displayed some fluctuation over the five-year period, decreasing from 4,830 million USD in 2018 to 3,813 million USD in 2019. There was a subsequent increase to 4,432 million USD in 2020, followed by a significant rise to 7,152 million USD in 2021. This upward trend continued moderately into 2022, reaching 7,866 million USD. Overall, current assets more than doubled from 2018 to 2022, indicating an expansion in liquid or short-term resources.
- Current Liabilities
- Current liabilities decreased from 3,197 million USD in 2018 to 2,625 million USD in 2019 and then remained relatively stable at 2,656 million USD in 2020. Starting in 2021, current liabilities increased notably to 3,852 million USD, followed by a slight increase to 3,959 million USD in 2022. Despite the increase in the latter two years, current liabilities in 2022 remained below the 2018 level, suggesting some degree of control over short-term obligations.
- Current Ratio
- The current ratio, a measure of short-term liquidity, showed a consistent upward trend throughout the period. It slightly declined from 1.51 in 2018 to 1.45 in 2019, then improved to 1.67 in 2020. The ratio increased more notably in the last two years, reaching 1.86 in 2021 and 1.99 in 2022. This progression reflects an improvement in the company's ability to cover its current liabilities with current assets, signaling enhanced short-term financial stability.
- Summary
- Over the five-year span, the company demonstrated an overall growth in current assets coupled with a controlled increase in current liabilities after a period of reduction. The strengthening current ratio indicates improving liquidity management and financial health, particularly apparent from 2020 onwards. The significant rise in current assets in 2021 and 2022 may suggest increased capacity to meet short-term obligations, potentially positioning the company for more operational flexibility.
Quick Ratio
United States Steel Corp., 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 millions) | ||||||
| Cash and cash equivalents | ||||||
| Receivables, less allowance | ||||||
| Receivables from related parties | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Quick Ratio, Industry | ||||||
| Materials | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets demonstrated a fluctuating trend over the five-year period. Starting at $2,659 million in 2018, the value declined to $1,926 million in 2019, marking the lowest point in the dataset. Subsequently, there was a significant increase in quick assets reaching $2,979 million in 2020, followed by continued growth in 2021 and 2022, culminating at $5,139 million. This indicates a strengthening position in liquid assets during the latter years.
- Current Liabilities
- Current liabilities exhibited moderate variation throughout the period. Beginning at $3,197 million in 2018, there was a decrease to $2,625 million in 2019, followed by a slight increase to $2,656 million in 2020. However, in 2021, current liabilities rose substantially to $3,852 million and maintained an elevated level at $3,959 million in 2022. This suggests growing short-term obligations in the most recent years.
- Quick Ratio
- The quick ratio, which measures liquidity by comparing quick assets to current liabilities, showed an overall improving trend. The ratio decreased from 0.83 in 2018 to 0.73 in 2019, coinciding with a drop in quick assets and current liabilities. From 2019 onward, the ratio rose steadily to 1.12 in 2020, further improving to 1.20 in 2021, and reaching 1.30 in 2022. This upward trajectory reflects enhanced liquidity and a stronger ability to meet short-term liabilities without relying on inventory sales.
Cash Ratio
United States Steel Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Cash Ratio, Industry | ||||||
| Materials | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets demonstrated notable fluctuations over the analyzed period. Starting at $1,000 million in 2018, there was a decline to $749 million in 2019. This was followed by a substantial increase to $1,985 million in 2020, and a continuous rise to $2,522 million in 2021 and further to $3,504 million in 2022. Overall, the trend indicates a strong growth in cash reserves, particularly from 2019 onwards.
- Current liabilities
- Current liabilities showed some variability, starting at $3,197 million in 2018, followed by a decrease to $2,625 million in 2019. Subsequently, there was a slight increase to $2,656 million in 2020, then a marked rise to $3,852 million in 2021, and a moderate increase to $3,959 million in 2022. The upward movement since 2020 suggests growing short-term obligations.
- Cash ratio
- The cash ratio, reflecting liquidity position, started at 0.31 in 2018 and slightly decreased to 0.29 in 2019. It then improved significantly to 0.75 in 2020, albeit declining slightly to 0.65 in 2021 before rising again to 0.89 in 2022. This overall upward trend points to a strengthening liquidity position, with cash available relative to current liabilities increasing over time.
- Summary
- There is a clear improvement in liquidity as evidenced by the rising cash ratio and increasing total cash assets. Despite an increase in current liabilities in the last two years, the growth in cash reserves has outpaced liabilities, resulting in a more favorable liquidity position. This could indicate better cash management or increased cash generation capabilities. The fluctuations in liabilities warrant monitoring but have not compromised short-term financial stability based on the cash ratio trends.