Chord Energy Corp (CHRD)

Chord Energy Corp's liquidity position as indicated by the current ratio has shown fluctuations over the years, ranging from 0.80 to 1.32. This ratio suggests that the company had limited ability to cover its short-term obligations in 2020 but improved significantly in 2021 before declining slightly in the following years. Despite the fluctuations, the current ratio generally stayed above 1, indicating that the company could meet its current liabilities with its current assets.

When considering the quick ratio, which provides a more stringent view of liquidity by excluding inventory from current assets, Chord Energy Corp's ability to meet its short-term obligations improved from 2020 to 2022 before experiencing a decline in 2023 and 2024. The quick ratio ranged from 0.02 to 0.44, with the lowest value in 2024 indicating potential challenges in meeting immediate liabilities without relying on inventory.

The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, followed a similar trend to the quick ratio. Ranging from 0.02 to 0.44, the cash ratio generally increased from 2020 to 2022 before falling in the subsequent years. This suggests that while Chord Energy Corp had a higher proportion of cash to meet short-term obligations in the initial years, this ratio decreased towards 2024.

Overall, the analysis of Chord Energy Corp's liquidity ratios highlights the company's varying ability to meet its short-term obligations over the years, with improvements in certain ratios offset by declines in others. Monitoring these ratios can provide valuable insights into the company's liquidity management and potential financial risks.

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Additional liquidity measure

Chord Energy Corp's cash conversion cycle has shown a favorable trend over the past five years, decreasing from 14.69 days as of December 31, 2020, to 8.72 days as of December 31, 2024. This indicates that the company has been able to more efficiently convert its investments in raw materials and production into cash receipts from sales. A decreasing cash conversion cycle suggests improved efficiency in managing working capital, potentially leading to better liquidity and profitability. It is essential for Chord Energy Corp to continue monitoring and managing its cash conversion cycle to sustain this positive trend and optimize its financial performance.