Cable One Inc (CABO)

Based on the provided data, Cable One Inc's liquidity ratios exhibit fluctuations over the reporting periods.

The current ratio, which indicates the company's ability to cover short-term liabilities with its current assets, shows a peak of 7.16 on March 31, 2021, indicating a strong liquidity position at that time. However, the ratio declines over subsequent periods, with a significant drop to 0.93 on September 30, 2024, suggesting a potential strain on the company's short-term liquidity.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, follows a similar pattern to the current ratio but generally shows lower values. The peak quick ratio of 10.40 on March 31, 2021, signals a very strong ability to meet short-term obligations, but it also experiences a decline to 0.72 on December 31, 2024, indicating a potential liquidity challenge.

The cash ratio, representing the most conservative measure of liquidity by considering only cash and cash equivalents to cover short-term liabilities, mirrors the trends observed in the current and quick ratios. The company shows a strong cash position with a ratio of 10.40 on March 31, 2021, but this ratio decreases to 0.72 on December 31, 2024, suggesting a reduction in the ability to pay off immediate liabilities with cash reserves alone.

Overall, the fluctuating trends in Cable One Inc's liquidity ratios indicate varying levels of short-term liquidity over the reported periods. It is essential for the company to closely monitor its liquidity position to ensure it can meet its financial obligations as they come due.

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Additional liquidity measure

The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Cable One Inc's cash conversion cycle fluctuated over the period from March 31, 2020, to December 31, 2024, with a range of 0 to 44.24 days.

In March 2020, Cable One Inc had a cash conversion cycle of 17.66 days, which decreased to 11.55 days by December 2020. This reduction indicates an improvement in the company's efficiency in managing its working capital during that period.

The cash conversion cycle then increased to 21.09 days by March 2022, before dropping significantly to 0.00 days by June 2022. This sudden drop could suggest a potential change in the company's inventory management or payment collection practices. However, the cycle increased again to 44.24 days by December 2023, indicating a possible delay in converting investments into cash flows during that period.

It is important to note that a lower cash conversion cycle is generally favorable, as it indicates that the company is able to generate cash quickly from its operations. On the other hand, a higher cycle may suggest inefficiencies in working capital management or challenges in converting investments into cash efficiently. Cable One Inc should continue to monitor and optimize its cash conversion cycle to improve its overall financial performance and liquidity position.