Alpha Metallurgical Resources Inc (AMR)

Alpha Metallurgical Resources Inc's liquidity ratios have generally improved over the past four years, indicating a strengthening financial position in terms of the company's ability to meet its short-term obligations.

The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has shown a consistent upward trend, increasing from 1.97 in 2020 to 3.38 in 2023. This suggests that Alpha Metallurgical Resources Inc has significantly increased its ability to meet its short-term obligations using its current assets.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. This ratio has also shown improvement over the years, increasing from 1.51 in 2020 to 2.64 in 2023. This indicates that the company has a higher level of quick assets to cover its current liabilities, which is a positive indicator of short-term liquidity.

The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has been relatively stable over the years, aside from a significant increase in 2022. The ratio decreased from 0.95 in 2020 to 0.99 in 2023, indicating that Alpha Metallurgical Resources Inc may have slightly lower cash reserves relative to its current liabilities, although still maintaining a reasonable cash position.

Overall, the upward trends in both the current and quick ratios reflect a positive liquidity position for Alpha Metallurgical Resources Inc, indicating that the company has significantly strengthened its ability to meet its short-term obligations efficiently.

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Additional liquidity measure

The cash conversion cycle of Alpha Metallurgical Resources Inc has shown fluctuations over the past four years. In 2023, the company's cash conversion cycle increased to 69.47 days from 51.33 days in 2022. This indicates that it took the company 69.47 days on average to convert its investments in raw materials and other resources into cash generated from sales.

Comparing this to previous years, there was a significant increase from 2022 to 2023, suggesting a potential inefficiency in managing the company's working capital. In 2021, the cash conversion cycle was even higher at 87.60 days, reflecting a longer period for the company to convert its investments into cash.

However, back in 2020, the company managed to bring down its cash conversion cycle to 51.69 days, indicating a more efficient management of working capital during that period.

Overall, it is essential for Alpha Metallurgical Resources Inc to closely monitor its cash conversion cycle to ensure optimal management of working capital and to improve overall financial performance.