Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Analysis of Profitability Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
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Liquidity Ratios (Summary)
Valero Energy Corp., liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 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), 10-K (reporting date: 2019-12-31).
- Current Ratio
- The current ratio exhibits variability over the five-year period. It increased from 1.44 in 2019 to a peak of 1.71 in 2020, indicating improved short-term liquidity during that year. However, it declined to 1.26 in 2021, suggesting a reduction in the company's ability to cover current liabilities with current assets. The ratio then showed a moderate recovery, rising to 1.38 in 2022 and further to 1.56 in 2023, reflecting an overall strengthening in liquidity towards the end of the period.
- Quick Ratio
- The quick ratio follows a similar pattern to the current ratio, albeit at lower values, as expected given the exclusion of inventory. It rose from 0.88 in 2019 to 1.01 in 2020, surpassing the one-to-one benchmark which indicates good short-term financial health without relying on inventory sales. The quick ratio then declined to 0.86 in 2021, mirroring the drop seen in the current ratio. Subsequently, it improved steadily to 0.96 in 2022 and 1.07 in 2023, suggesting enhanced liquidity excluding inventory assets.
- Cash Ratio
- The cash ratio remained consistently lower than both the current and quick ratios, reflecting its stricter measure of liquidity focusing solely on cash and cash equivalents. It increased from 0.20 in 2019 to 0.36 in 2020, indicating a significant boost in immediately available cash assets. This was followed by a decline to 0.24 in 2021, but the ratio then gradually increased again to 0.28 in 2022 and 0.32 in 2023. Overall, this demonstrates a cautious but stable buildup of cash reserves maintaining a more conservative liquidity position.
Current Ratio
Valero Energy Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Current Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Current Ratio, Industry | ||||||
| Energy | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibited an overall upward trend over the five-year period. Starting at $18,969 million in 2019, there was a decline in 2020 to $15,844 million. From 2020 onward, current assets increased steadily each year, reaching $21,165 million in 2021, $24,133 million in 2022, and $26,221 million in 2023. This indicates a growing liquidity buffer after the initial decline in 2020.
- Current Liabilities
- Current liabilities showed a more volatile pattern. Initially, liabilities decreased significantly from $13,160 million in 2019 to $9,283 million in 2020. However, liabilities surged to $16,851 million in 2021 and remained relatively stable with slight fluctuations in the following years — $17,461 million in 2022 and $16,802 million in 2023. This implies an increase in short-term obligations after 2020, stabilizing at a higher level.
- Current Ratio
- The current ratio reflects the company’s short-term liquidity position and ability to cover current liabilities with current assets. The ratio improved from 1.44 in 2019 to a peak of 1.71 in 2020, driven largely by the substantial decrease in current liabilities in that year. However, the ratio declined to 1.26 in 2021 due to the sharp rise in liabilities, then rebounded to 1.38 in 2022 and further to 1.56 in 2023, supported by continued growth in current assets and slight reductions in liabilities. Overall, the current ratio remains above 1 throughout the period, suggesting a generally healthy liquidity position despite fluctuations.
- Summary
- The data reveals a dynamic liquidity situation with initial contractions in current assets and liabilities in 2020, likely indicative of external or market influences impacting that year. Subsequently, the company has managed to expand its current assets consistently while current liabilities increased and then stabilized at a higher level relative to the start of the period. The current ratio’s movement mirrors these changes and suggests that the company maintains adequate short-term financial health. The upward trend in current assets coupled with the current ratio above 1 suggests ongoing capacity to meet short-term obligations effectively, notwithstanding the increased liabilities post-2020.
Quick Ratio
Valero Energy Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Receivables, net | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Quick Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Quick Ratio, Industry | ||||||
| Energy | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Analysis of Total Quick Assets
- The total quick assets showed a fluctuating yet generally upward trajectory over the five-year period. After a decline from approximately $11,571 million in 2019 to $9,422 million in 2020, the quick assets rebounded strongly, reaching $14,500 million in 2021. This positive momentum continued with an increase to $16,781 million in 2022 and further growth to $17,949 million in 2023. The increase after 2020 suggests a recovery and strengthening of liquid assets.
- Analysis of Current Liabilities
- Current liabilities exhibited notable volatility. There was a significant reduction from $13,160 million in 2019 to $9,283 million in 2020, followed by a sharp rise to $16,851 million in 2021. The liabilities remained elevated with slight increases to $17,461 million in 2022, then a small decrease to $16,802 million in 2023. This pattern indicates fluctuations in short-term obligations, with a notable increase after 2020 that largely persisted.
- Analysis of Quick Ratio
- The quick ratio, an indicator of short-term liquidity, displayed moderate variability over the period. It began below 1.0 at 0.88 in 2019, improved to slightly above 1.0 at 1.01 in 2020, then dropped back to 0.86 in 2021. The ratio recovered to 0.96 in 2022 and improved further to 1.07 in 2023. Overall, these values suggest a trend toward strengthening liquidity, with the company maintaining or improving its ability to meet short-term liabilities with quick assets, particularly in the most recent years.
- Summary of Financial Position Trends
- The data reveals that the company experienced a dip in quick assets and current liabilities in 2020, possibly reflecting wider economic challenges during that period. Subsequently, both quick assets and current liabilities increased significantly, with quick assets growing at a healthier rate than liabilities, contributing to an improved quick ratio by 2023. This progression indicates enhanced liquidity management and a stronger short-term financial position in recent years.
Cash Ratio
Valero Energy Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Cash Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Cash Ratio, Industry | ||||||
| Energy | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets demonstrated a consistent upward trend over the five-year period. Starting at 2,583 million USD in 2019, cash assets increased annually, reaching 5,424 million USD by the end of 2023. This represents more than a doubling of cash assets over the period, indicating improved liquidity reserves.
- Current Liabilities
- Current liabilities showed considerable volatility during the same period. They decreased significantly from 13,160 million USD in 2019 to 9,283 million USD in 2020, which may have been influenced by short-term strategic or operational changes. However, liabilities then rose sharply to 16,851 million USD in 2021 and further increased to 17,461 million USD in 2022. A slight decrease followed in 2023, bringing current liabilities to 16,802 million USD. Overall, current liabilities ended higher in 2023 compared to 2019, reflecting increased short-term obligations or operational scaling.
- Cash Ratio
- The cash ratio, representing the proportion of cash assets to current liabilities, showed fluctuations reflecting the trends in assets and liabilities. It increased from 0.20 in 2019 to a peak of 0.36 in 2020, primarily due to the decrease in current liabilities and an increase in cash assets. The ratio declined in 2021 to 0.24, recovering slightly to 0.28 in 2022, and climbed again to 0.32 in 2023. These changes suggest that the company's short-term liquidity position improved overall compared to 2019, despite some volatility. The 2023 ratio indicates that cash assets cover nearly one-third of current liabilities, which points to a moderate liquidity buffer.