Peabody Energy Corp (BTU)

Peabody Energy Corp's liquidity ratios have shown fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been relatively stable, ranging from 1.65 in 2019 to 2.58 in 2022. In 2023, the current ratio decreased to 2.06, indicating a moderate decline in short-term liquidity compared to the previous year.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited variability. Peabody Energy Corp's quick ratio ranged from 1.04 in 2019 to 1.88 in 2022. In 2023, the quick ratio declined to 1.32, suggesting a reduced ability to meet short-term obligations without relying on inventory assets.

The cash ratio, which assesses the company's ability to cover short-term liabilities using only cash and cash equivalents, displayed fluctuations over the period analyzed. Peabody Energy Corp's cash ratio ranged from 0.75 in 2019 to 1.42 in 2022. In 2023, the cash ratio decreased to 0.99, indicating a lower proportion of cash and equivalents relative to short-term liabilities compared to the previous year.

Overall, the liquidity ratios of Peabody Energy Corp indicate that while the company has generally maintained a solid ability to meet its short-term obligations over the past five years, there has been some variability in its liquidity position. The recent decreases in the current, quick, and cash ratios in 2023 may suggest a slight liquidity challenge that warrants monitoring and further analysis.

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Additional liquidity measure

The cash conversion cycle of Peabody Energy Corp has shown some fluctuations over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

In 2023, the cash conversion cycle increased to 65.60 days, which was higher compared to the previous year. This indicates that the company took longer to convert its investments into cash, possibly due to changes in inventory management or collection periods.

Looking back at 2022, the cash conversion cycle was 60.92 days, also higher than in 2021. This suggests that the company faced challenges in managing its working capital efficiently, leading to a longer cycle.

In 2021, there was a notable decrease in the cash conversion cycle to 53.53 days, indicating improved efficiency in managing working capital. This trend continued from 2020, where the cycle was 44.30 days, reaching a low point.

However, in 2019, the cash conversion cycle increased again to 54.49 days, reflecting a temporary setback in the company's working capital management.

Overall, the cash conversion cycle of Peabody Energy Corp has shown variability over the period, with fluctuations in efficiency in converting investments into cash flows. It is essential for the company to continuously monitor and optimize its working capital management to ensure a healthy cash conversion cycle and overall financial performance.