Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
EQT Corp., liquidity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Current ratio | 0.45 | 0.69 | 1.30 | 0.84 | 0.94 | |
| Quick ratio | 0.31 | 0.33 | 0.46 | 0.53 | 0.56 | |
| Cash ratio | 0.02 | 0.01 | 0.00 | 0.00 | 0.02 |
Based on: 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), 10-K (reporting date: 2017-12-31).
- Current Ratio
- The current ratio displays a fluctuating trend over the five-year period. It started below 1 at 0.94 in 2017, indicating that current liabilities slightly exceeded current assets at that time. The ratio declined to 0.84 in 2018, suggesting a deteriorating liquidity position. However, in 2019 there was a notable improvement to 1.3, which shows an excess of current assets over liabilities. Subsequently, the ratio decreased significantly to 0.69 in 2020 and further to 0.45 in 2021, indicating a weakening liquidity position and a potential challenge in covering short-term obligations.
- Quick Ratio
- The quick ratio follows a downward trend over the period, starting at 0.56 in 2017 and declining to 0.31 by 2021. This consistent decline suggests that the company’s most liquid assets, excluding inventories, are becoming relatively insufficient to cover current liabilities. The steady decrease each year highlights a sustained reduction in the company’s immediate liquidity and its ability to meet short-term obligations without relying on inventory sales.
- Cash Ratio
- The cash ratio remains very low throughout the period, oscillating near zero. Starting at 0.02 in 2017, there was a drop to zero in 2018 and 2019, followed by a marginal increase back to 0.02 by 2021. The persistently low cash ratio indicates limited cash and cash equivalents available to cover current liabilities, revealing a tight cash position and limited immediate liquidity buffers.
Current Ratio
EQT Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 2,286,766) | 1,215,450) | 1,754,855) | 1,969,664) | 1,163,055) | |
| Current liabilities | 5,080,171) | 1,762,410) | 1,345,902) | 2,355,001) | 1,232,237) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 0.45 | 0.69 | 1.30 | 0.84 | 0.94 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | 1.26 | 1.18 | — | — | — | |
| ConocoPhillips | 1.34 | 2.25 | — | — | — | |
| Exxon Mobil Corp. | 1.04 | 0.80 | — | — | — | |
| Occidental Petroleum Corp. | 1.23 | 1.07 | — | — | — | |
| Current Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.15 | 1.00 | — | — | — | |
| Current Ratio, Industry | ||||||
| Energy | 1.15 | 1.02 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= 2,286,766 ÷ 5,080,171 = 0.45
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibited variability over the examined period. Starting from approximately $1.16 billion in 2017, they increased significantly to nearly $1.97 billion in 2018. Following this peak, there was a decline in 2019 to about $1.75 billion and a further decrease in 2020 to roughly $1.22 billion. However, in 2021, current assets experienced a substantial recovery, rising to approximately $2.29 billion, the highest value within the five-year span.
- Current Liabilities
- Current liabilities showed an overall increasing trend with some fluctuations. Beginning at approximately $1.23 billion in 2017, liabilities almost doubled to $2.36 billion in 2018, then decreased to about $1.35 billion in 2019. The amount climbed again to approximately $1.76 billion in 2020, followed by a sharp surge to $5.08 billion in 2021, marking a significant increase and the largest value in the period under review.
- Current Ratio
- The current ratio, which measures short-term liquidity, demonstrated a downward trajectory over the period. It started slightly below unity at 0.94 in 2017, dropped to 0.84 in 2018, then improved to 1.3 in 2019, indicating better liquidity that year. However, the ratio then declined markedly to 0.69 in 2020 and further to 0.45 in 2021. This suggests a deteriorating liquidity position in the last two years, with current liabilities growing disproportionately to current assets.
- Summary
- Throughout the period, current assets and liabilities both experienced considerable fluctuations. The substantial increase in current liabilities in 2021, coupled with a moderate increase in current assets, resulted in a sharp decline in the current ratio, highlighting potential liquidity concerns. The ratio falling well below 1.0 in the final two years suggests that the company’s ability to cover short-term obligations with its current assets weakened, which may warrant further investigation and strategic response.
Quick Ratio
EQT Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 113,963) | 18,210) | 4,596) | 3,487) | 26,311) | |
| Accounts receivable, less provision for doubtful accounts | 1,438,031) | 566,552) | 610,088) | 1,241,843) | 664,685) | |
| Total quick assets | 1,551,994) | 584,762) | 614,684) | 1,245,330) | 690,996) | |
| Current liabilities | 5,080,171) | 1,762,410) | 1,345,902) | 2,355,001) | 1,232,237) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.31 | 0.33 | 0.46 | 0.53 | 0.56 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.90 | 0.77 | — | — | — | |
| ConocoPhillips | 1.10 | 1.98 | — | — | — | |
| Exxon Mobil Corp. | 0.69 | 0.44 | — | — | — | |
| Occidental Petroleum Corp. | 0.84 | 0.50 | — | — | — | |
| Quick Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.80 | 0.62 | — | — | — | |
| Quick Ratio, Industry | ||||||
| Energy | 0.81 | 0.63 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 1,551,994 ÷ 5,080,171 = 0.31
2 Click competitor name to see calculations.
- Total Quick Assets
- Over the five-year period, total quick assets exhibited significant fluctuations. Starting at 690,996 thousand US dollars in 2017, the value increased sharply to 1,245,330 thousand in 2018. However, it subsequently declined over the next two years, falling to 614,684 thousand in 2019 and further to 584,762 thousand in 2020. In 2021, there was a notable recovery, with quick assets rising substantially to 1,551,994 thousand dollars, reaching the highest value in the given timeframe.
- Current Liabilities
- Current liabilities showed an overall increasing trend with pronounced volatility. Beginning at 1,232,237 thousand US dollars in 2017, current liabilities nearly doubled by 2018 to 2,355,001 thousand. They then decreased in 2019 to 1,345,902 thousand but increased again in 2020 to 1,762,410 thousand. A dramatic surge occurred in 2021, with liabilities reaching 5,080,171 thousand dollars, marking the most significant increase over the entire period.
- Quick Ratio
- The quick ratio consistently declined year over year, indicating a deteriorating short-term liquidity position. From 0.56 in 2017, the ratio slightly decreased to 0.53 in 2018 and further dropped to 0.46 in 2019. The downward trend continued more sharply through 2020 and 2021, reaching 0.33 and then 0.31 respectively. Despite the increase in total quick assets in 2021, the sharp rise in current liabilities outpaced asset growth, resulting in the lowest quick ratio during the observed period.
Cash Ratio
EQT Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 113,963) | 18,210) | 4,596) | 3,487) | 26,311) | |
| Total cash assets | 113,963) | 18,210) | 4,596) | 3,487) | 26,311) | |
| Current liabilities | 5,080,171) | 1,762,410) | 1,345,902) | 2,355,001) | 1,232,237) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.02 | 0.01 | 0.00 | 0.00 | 0.02 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.21 | 0.25 | — | — | — | |
| ConocoPhillips | 0.55 | 1.46 | — | — | — | |
| Exxon Mobil Corp. | 0.12 | 0.08 | — | — | — | |
| Occidental Petroleum Corp. | 0.33 | 0.24 | — | — | — | |
| Cash Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.21 | 0.22 | — | — | — | |
| Cash Ratio, Industry | ||||||
| Energy | 0.22 | 0.22 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 113,963 ÷ 5,080,171 = 0.02
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited significant fluctuations over the analyzed period. Beginning at approximately $26.3 million at the end of 2017, the value sharply declined in 2018 to around $3.5 million, followed by a slight increase to about $4.6 million in 2019. In 2020, cash assets notably increased to $18.2 million and then surged substantially in 2021, reaching nearly $114 million. This trend suggests a period of reduced liquidity in 2018 and 2019, with a strong recovery and impressive cash accumulation by the end of 2021.
- Current Liabilities
- Current liabilities demonstrated considerable volatility throughout the years. Starting at approximately $1.23 billion in 2017, liabilities increased significantly to about $2.36 billion in 2018. They decreased to roughly $1.35 billion in 2019 but rose again to $1.76 billion in 2020. The most notable change occurred in 2021, where current liabilities escalated markedly to $5.08 billion. This upward trend, particularly the large increase in 2021, indicates rising short-term obligations that may reflect increased operational costs or financing activities.
- Cash Ratio
- The cash ratio remained very low across the period, ranging from 0 to 0.02. Starting at 0.02 in 2017, it dropped to 0 in 2018 and remained at 0 through 2019, signaling minimal immediate liquidity coverage for short-term liabilities during those years. A slight recovery occurred in 2020 and 2021 when the ratio increased to 0.01 and 0.02 respectively. Despite this improvement, the ratio indicates a generally weak position in terms of cash liquidity relative to current liabilities, highlighting potential concerns regarding the company’s ability to cover short-term obligations solely with cash assets.