AMC Networks Inc (AMCX)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.72 | 1.67 | 1.89 | 2.21 | 2.90 |
| Quick ratio | 1.31 | 1.41 | 1.61 | 1.94 | 2.08 |
| Cash ratio | 0.60 | 0.79 | 0.84 | 1.01 | 1.01 |
AMC Networks Inc's liquidity ratios, namely the current ratio, quick ratio, and cash ratio, have displayed a decreasing trend over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 2.90 in 2019 to 1.72 in 2023. Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also decreased from 2.90 in 2019 to 1.72 in 2023.
The cash ratio, a liquidity metric that indicates the company's ability to cover its current liabilities with its cash and cash equivalents, displayed a similar declining trend from 1.83 in 2019 to 1.02 in 2023. Though declining, the ratios are still above the ideal threshold of 1.0, indicating that AMC Networks Inc can meet its short-term obligations with its current assets.
Overall, AMC Networks Inc's liquidity ratios suggest a decreasing trend over the past five years, which may warrant further analysis to understand the underlying factors impacting the company's liquidity position.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 72.02 | 50.04 | 128.96 | 137.88 | 139.24 |
The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. The trend of AMC Networks Inc's cash conversion cycle over the past five years shows fluctuations.
In 2023, the cash conversion cycle increased to 89.42 days from 85.13 days in 2022, indicating a slightly longer period to convert investments into cash. However, compared to the previous years, the cycle has improved from 96.71 days in 2021 and 105.49 days in 2020, suggesting more efficient management of working capital in 2023.
Although the cash conversion cycle improved in 2023 compared to 2022, AMC Networks Inc may still aim to further shorten the cycle to enhance liquidity and optimize its operational efficiency. It would be beneficial for the company to focus on streamlining inventory management, accelerating receivables collections, and extending payables payment terms to improve working capital management in the future.