Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Analysis of Debt
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Liquidity Ratios (Summary)
Marathon Oil Corp., liquidity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
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 displayed fluctuations over the five-year period. It increased from 1.3 in 2017 to a peak of 1.59 in 2018, indicating improved short-term liquidity during that year. However, the ratio declined to 1.22 in 2019, followed by a slight recovery to 1.33 in 2020. In 2021, the current ratio decreased further to 1.11, suggesting a downward trend in the company's ability to cover current liabilities with current assets.
- Quick Ratio
- The quick ratio followed a similar pattern to the current ratio, beginning at 1.22 in 2017 and reaching its highest point of 1.39 in 2018. Subsequently, it declined to 1.13 in 2019, slightly rebounded to 1.23 in 2020, then decreased again to 1.05 in 2021. This trend indicates variability in the company's liquid asset coverage excluding inventories, with a diminishing buffer in the most recent year.
- Cash Ratio
- The cash ratio showed greater volatility compared to the other liquidity ratios. It started at a relatively low level of 0.29 in 2017 but rose significantly to 0.8 in 2018, reflecting a strong increase in cash and cash equivalents relative to current liabilities. Afterward, the ratio declined to 0.49 in 2019 and then increased moderately to 0.61 in 2020. By 2021, it had dropped sharply to 0.35, indicating a reduction in the company’s immediate liquidity position.
- Overall Liquidity Trend
- All three liquidity ratios peaked in 2018, suggesting that the company had its strongest short-term financial position that year. Subsequent years show a general decline with some slight recoveries, especially in 2020, before reaching lower levels in 2021. The decreasing trend in the latest year across all liquidity metrics points to a weakening ability to meet short-term obligations promptly.
Current Ratio
Marathon Oil 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 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: 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 Click competitor name to see calculations.
- Current Assets
- Current assets experienced fluctuations over the observed periods. After peaking at 2,921 million US dollars in 2018, the value decreased significantly to 2,135 million in 2019, and further declined to a low of 1,612 million in 2020. The figure rebounded slightly to 1,821 million in 2021, indicating some recovery but remaining below the levels seen in 2017 and 2018.
- Current Liabilities
- Current liabilities showed a generally downward trend from 1,968 million US dollars in 2017 to 1,213 million in 2020. However, there was an increase to 1,637 million in 2021, suggesting a partial rise in short-term obligations after a period of reduction.
- Current Ratio
- The current ratio, indicating liquidity, improved from 1.3 in 2017 to 1.59 in 2018, reflecting stronger short-term financial stability during that year. It then declined to 1.22 in 2019 but improved again to 1.33 in 2020. In 2021, the ratio dropped to 1.11, the lowest in the series, which suggests decreased liquidity and a tighter short-term financial position relative to earlier years.
- Overall Analysis
- The data reveals a volatile period for short-term financial metrics. The initial increase in liquidity ratios and current assets in 2018 was followed by a period of decline through 2020. While current liabilities decreased during this period, the reduction in current assets was more pronounced, leading to fluctuations in the current ratio. The decline in the current ratio to 1.11 in 2021 could signal increased liquidity risk, as assets available to cover short-term liabilities have diminished relative to previous years. The partial recovery in current assets in 2021, alongside the rise in current liabilities, suggests cautious financial management but highlights ongoing pressures on working capital.
Quick Ratio
Marathon Oil 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 millions) | ||||||
| Cash and cash equivalents | ||||||
| Receivables, less reserve | ||||||
| Notes receivable | ||||||
| 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: 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
= ÷ =
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets displayed a fluctuating trend over the five-year period. Starting at US$2,393 million in 2017, the amount increased slightly to US$2,541 million in 2018. This was followed by a notable decline to US$1,980 million in 2019, then a further decrease reaching a low of US$1,489 million by the end of 2020. In 2021, total quick assets showed a modest recovery, rising to US$1,722 million, though still remaining below the levels observed in 2017 and 2018.
- Current liabilities
- Current liabilities demonstrated an overall downward trend from 2017 to 2020, decreasing from US$1,968 million to US$1,213 million. This decline was interrupted in 2021 when current liabilities increased significantly to US$1,637 million, partially reversing the earlier reductions but still remaining below the initial 2017 level.
- Quick ratio
- The quick ratio exhibited variability within the range of 1.05 to 1.39. It increased from 1.22 in 2017 to a peak of 1.39 in 2018, reflecting an improved liquidity position relative to current liabilities during that year. Subsequently, the ratio declined to 1.13 in 2019 before rebounding to 1.23 in 2020. By 2021, the quick ratio had decreased again to 1.05, indicating a slight tightening of liquidity compared to previous years but still maintaining a ratio above 1, which generally suggests the capability to cover current liabilities with quick assets.
Cash Ratio
Marathon Oil Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in 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: 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
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- Over the observed five-year period, total cash assets exhibited significant fluctuation. The level increased substantially from 563 million USD in 2017 to a peak of 1,462 million USD in 2018. However, it subsequently declined in the following years, dropping to 858 million USD in 2019, 742 million USD in 2020, and further to 580 million USD in 2021. This indicates a general decrease in cash holdings after the 2018 peak.
- Current Liabilities
- The current liabilities showed a generally downward trend from 2017 through 2020, starting at 1,968 million USD and decreasing each year to reach 1,213 million USD by 2020. Despite this reduction, liabilities increased again in 2021 to 1,637 million USD, suggesting a partial reversal of the prior declining trend.
- Cash Ratio
- The cash ratio, which measures the company's liquidity by comparing cash assets to current liabilities, mirrored the movements seen in cash assets and liabilities. It rose sharply from 0.29 in 2017 to 0.8 in 2018, indicating a substantial improvement in liquidity. Subsequently, the ratio declined over the next three years, dropping to 0.49 in 2019, increasing slightly to 0.61 in 2020, and then falling again to 0.35 in 2021. Although the ratio remains higher than the initial 2017 level, the fluctuations suggest varying liquidity conditions with a notable peak in 2018.