Churchill Downs Incorporated (CHDN)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.53 | 0.55 | 1.27 | 0.55 | 0.73 |
| Quick ratio | 0.35 | 0.36 | 1.01 | 1.85 | 0.49 |
| Cash ratio | 0.19 | 0.21 | 0.74 | 1.64 | 0.32 |
Churchill Downs, Inc.'s liquidity ratios show a fluctuating trend over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has been below 1 in four out of the five years, indicating potential liquidity challenges. The ratio decreased from 1.27 in 2021 to 0.53 in 2023, suggesting a significant decline in the company's ability to cover its short-term liabilities with current assets.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also displays a similar trend to the current ratio. The quick ratio has been consistently below 1, indicating limited ability to settle immediate obligations without relying on inventory.
The cash ratio, the most conservative liquidity measure, shows a declining trend from 2019 to 2023. This ratio evaluates the company's ability to cover current liabilities with cash and cash equivalents only. A cash ratio below 1 implies that Churchill Downs, Inc. may struggle to meet its short-term obligations with readily available cash.
Overall, Churchill Downs, Inc.'s liquidity ratios indicate potential liquidity concerns and suggest that the company may need to improve its cash management and working capital practices to enhance its short-term solvency.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -49.44 | -57.94 | 1.59 | 2.03 | -4.30 |
The cash conversion cycle of Churchill Downs, Inc. has fluctuated over the past five years. In 2023, the company's cash conversion cycle improved to -29.87 days, indicating a quicker turnaround of cash compared to the previous year when it was -40.42 days. This improvement suggests that Churchill Downs, Inc. was able to manage its cash more efficiently in 2023.
Comparing to 2021, the cash conversion cycle was significantly lower at -16.19 days in 2023, indicating that the company was able to convert its investments in inventory and receivables into cash at a faster rate in the most recent year.
Overall, Churchill Downs, Inc. has shown a generally effective management of its cash conversion cycle over the past five years, with fluctuations in the metric reflecting changes in the company's operational efficiency and effectiveness in managing its working capital components.