Arch Resources Inc (ARCH)

The liquidity ratios of Arch Resources Inc demonstrate the company's ability to meet its short-term financial obligations.

The current ratio has shown a fluctuating trend over the past five years, ranging from 1.69 to 2.49. In recent years, the current ratio has been above 2, indicating that the company has more than enough current assets to cover its current liabilities. This suggests a strong liquidity position and the ability to easily meet short-term obligations.

The quick ratio, which excludes inventory from current assets, has also exhibited variability over the same period, with values ranging from 1.20 to 1.62. Despite some fluctuations, the quick ratio has generally remained above 1, indicating that the company has an adequate level of liquid assets to cover its near-term liabilities without relying on inventory.

The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, has likewise fluctuated over the past five years, with values ranging from 0.64 to 0.98. Although the cash ratio has been below 1 in recent years, indicating that the company may not have sufficient cash on hand to cover its immediate obligations, it has generally remained above 0.80, suggesting a relatively healthy cash position.

Overall, the liquidity ratios of Arch Resources Inc indicate a generally strong liquidity position, with the company able to meet its short-term obligations comfortably. However, the fluctuations in the ratios over the years may warrant continued monitoring to ensure sustained liquidity and financial stability.

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Additional liquidity measure

The cash conversion cycle is a key metric that reflects how efficiently a company manages its working capital. Looking at Arch Resources Inc's cash conversion cycle over the past five years, we can observe fluctuations in the company's ability to convert its investments in inventory and accounts receivable into cash.

In 2023, the cash conversion cycle increased to 37.37 days, indicating that the company took longer to convert its raw materials and finished goods into sales and ultimately into cash. This could be a result of inefficiencies in inventory management or delays in collecting accounts receivable.

In 2022, the cash conversion cycle decreased to 25.02 days, signaling an improvement in the company's working capital management compared to the previous year. A shorter cash conversion cycle suggests that Arch Resources Inc was able to more quickly turn its investments into cash, potentially resulting in improved liquidity and financial performance.

In 2021, the cash conversion cycle spiked to 60.85 days, which was significantly higher than in the previous years. This indicates that the company faced challenges in efficiently managing its working capital, possibly due to increased inventory levels or difficulties in collecting receivables.

In 2020, the cash conversion cycle decreased to 32.89 days, showing some improvement in Arch Resources Inc's working capital management compared to the previous year. However, it was still higher than in 2019, suggesting that there were lingering inefficiencies in the company's cash conversion process.

In 2019, the cash conversion cycle was at 26.67 days, indicating relatively efficient working capital management by Arch Resources Inc. The company was able to quickly convert its investments into cash during this period.

Overall, fluctuations in the cash conversion cycle of Arch Resources Inc over the past five years reflect varying levels of efficiency in managing its working capital. It is important for the company to consistently monitor and improve its cash conversion cycle to optimize its liquidity and financial performance.