Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Liquidity Ratios (Summary)
Pioneer Natural Resources Co., 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).
The financial ratios for the periods ending December 31, 2019 through December 31, 2023 indicate notable fluctuations in the liquidity position of the entity.
- Current Ratio
- The current ratio showed a marked increase from 0.88 in 2019 to a peak of 1.52 in 2021, indicating a strengthening ability to cover short-term liabilities with current assets during this period. Subsequently, this ratio declined to 0.96 in 2022 and further to 0.88 in 2023, returning to its initial level from 2019. This decline suggests a reduction in liquidity coverage capacity in the most recent years.
- Quick Ratio
- The quick ratio, which excludes inventory from current assets to provide a stricter measure of liquidity, followed a similar trend. It rose from 0.77 in 2019 to 1.41 in 2021, signaling improved quick asset coverage of current liabilities. However, it then dropped considerably to 0.79 in 2022 and further to 0.66 in 2023, reflecting a weakening in immediate liquidity relative to the earlier period.
- Cash Ratio
- The cash ratio experienced the most volatility. Starting relatively low at 0.36 in 2019, it jumped to 0.85 in 2020 and reached a peak of 1.0 in 2021, indicating full coverage of current liabilities by cash and cash equivalents in that year. The subsequent decrease to 0.31 in 2022 and a further decline to 0.13 in 2023 portray a significant reduction in the company's most liquid assets relative to short-term liabilities, suggesting tighter cash management or potentially increased operational cash usage.
Overall, all three liquidity indicators exhibited a positive trend through 2021, demonstrating improved short-term financial resilience. This was followed by a discernible decline in 2022 and 2023, reverting or falling below initial levels. The rapid decrease in the cash ratio notably highlights a shift away from holding high levels of cash or cash equivalents in recent periods, which may require closer monitoring to ensure sufficient liquidity for operational needs.
Current Ratio
Pioneer Natural Resources Co., 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.
The financial data reveals several notable trends in the company's short-term financial position over the five-year period.
- Current Assets
- Current assets experienced a significant increase from 2019 to 2021, rising from 2,191 million US dollars to 6,173 million US dollars, indicating a strengthening liquidity position during these years. However, after peaking in 2021, current assets declined sharply in 2022 to 3,726 million US dollars and continued to decrease in 2023 to 2,605 million US dollars, approaching levels closer to those in 2019.
- Current Liabilities
- Current liabilities fluctuated during the period. They initially decreased from 2,496 million US dollars in 2019 to 1,906 million US dollars in 2020, suggesting an improved short-term financial obligation posture. Subsequently, liabilities increased substantially to 4,073 million US dollars in 2021 and remained elevated in the following years, with 3,887 million US dollars in 2022 and 2,974 million US dollars in 2023.
- Current Ratio
- The current ratio, a measure of short-term liquidity, followed a similar trend to current assets. The ratio improved from 0.88 in 2019 to a peak of 1.52 in 2021, marking a period where current assets were notably higher than current liabilities and suggesting strong liquidity. However, it declined to 0.96 in 2022 and further to 0.88 in 2023, signalling a return to a more constrained liquidity position similar to the level observed in 2019.
Overall, the data evidences a period of improved liquidity and asset growth culminating in 2021, followed by a reversal in 2022 and 2023 where both current assets and the current ratio decreased and current liabilities remained high. This suggests a tightening of short-term financial flexibility in the most recent years of the analysis.
Quick Ratio
Pioneer Natural Resources Co., 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 | ||||||
| Restricted cash | ||||||
| Accounts receivable, net | ||||||
| Investment in affiliate | ||||||
| Short-term investments, 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.
The financial data reveals notable fluctuations in the liquidity position over the five-year period under review. The total quick assets experienced substantial variation, reaching a peak in 2021 before declining in subsequent years. The highest recorded amount was US$ 5,762 million in 2021, contrasted with lower values in the surrounding years, indicating a temporary accumulation of highly liquid assets during that period.
Current liabilities also showed significant changes but followed a different trajectory. After a decline in 2020, the liabilities increased markedly in 2021 and remained relatively elevated through 2022, before decreasing again in 2023. Despite the reduction in 2023, liabilities remained higher than the levels reported in 2019 and 2020, suggesting increased short-term obligations in the later years.
The quick ratio trend closely mirrors the interaction between quick assets and current liabilities. The ratio improved from below 1 in 2019 to a high of 1.41 in 2021, reflecting strong short-term liquidity and the ability to cover immediate liabilities with liquid assets. However, after 2021, the quick ratio declined steadily, falling below 1 by 2022 and further to 0.66 in 2023. This downward movement indicates a weakening liquidity position, with quick assets becoming insufficient to meet current liabilities without resorting to other means.
- Total Quick Assets
- Strong growth from 2019 to 2021, more than doubling from US$ 1,927 million to US$ 5,762 million. This was followed by a significant decrease through 2022 and 2023, returning close to the initial 2019 levels.
- Current Liabilities
- Initial decline in 2020, then a sharp increase in 2021 and sustained elevated amounts in 2022, followed by a moderate reduction in 2023, remaining above the early period figures.
- Quick Ratio
- Improved liquidity position peaked in 2021 (1.41), signaling an ability to cover current liabilities comfortably with quick assets. The subsequent decline to 0.66 by 2023 suggests deteriorating short-term financial flexibility.
Overall, the data indicates that the company experienced a temporary improvement in liquidity during 2021, supported by high quick assets and controlled liabilities. However, the following years showed a reversal with declining liquid assets, increasing relative liabilities, and a reduced quick ratio, potentially signaling increased financial stress or strategic changes affecting working capital management.
Cash Ratio
Pioneer Natural Resources Co., 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 | ||||||
| Restricted cash | ||||||
| Investment in affiliate | ||||||
| Short-term investments, net | ||||||
| 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.
The financial data reveals significant fluctuations in the company's liquidity and short-term financial position over the analyzed periods.
- Total Cash Assets
- The total cash assets experienced a notable increase from 892 million US dollars at the end of 2019 to a peak of 4,077 million US dollars in 2021. However, this strong liquidity position diminished substantially in the following years, decreasing to 1,204 million US dollars in 2022 and further declining to 379 million US dollars by the end of 2023.
- Current Liabilities
- Current liabilities decreased from 2,496 million US dollars in 2019 to a lower level of 1,906 million US dollars in 2020, indicating an improvement in short-term obligations. However, a sharp increase is observed in 2021, rising to 4,073 million US dollars, closely matching the peak in cash assets that same year. Following 2021, current liabilities slightly decreased to 3,887 million US dollars in 2022 and further declined to 2,974 million US dollars by the end of 2023. Despite this reduction, liabilities remained significantly higher compared to the initial years of the period under review.
- Cash Ratio
- The cash ratio, representing the company's ability to cover current liabilities with cash, mirrored the trends in cash assets and current liabilities. It increased markedly from 0.36 in 2019 to a high of 1.00 in 2021, indicating that at this point, cash assets were sufficient to cover all current liabilities. However, this ratio fell sharply thereafter, dropping to 0.31 in 2022 and continuing to decline to 0.13 by 2023. This suggests a considerable weakening in liquidity, with cash assets covering only a small fraction of current liabilities in the most recent year.
Overall, the data indicates that the company improved its liquidity position substantially until 2021 but faced a notable decline in cash assets and liquidity ratios in subsequent years. The reduction in cash ratio by 2023 to a low level could signal increased reliance on non-cash current assets or other forms of financing to meet short-term obligations, posing potential risks to short-term financial stability.