Concentra Group Holdings Parent, Inc. (CON)

Concentra Group Holdings Parent, Inc.'s liquidity ratios reflect its ability to meet short-term obligations and maintain financial stability.

The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has shown a slight improvement over the years. In 2023, the current ratio stands at 1.07, indicating that the company has $1.07 in current assets for every $1 in current liabilities. This implies that Concentra has enough short-term assets to cover its short-term obligations, although the ratio is quite close to 1, suggesting a relatively tight liquidity position.

The quick ratio, or acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. With the quick ratio decreasing from 0.13 in 2022 to 0.11 in 2023, there is a decline in the company's ability to meet short-term obligations using only the most liquid assets. This indicates that Concentra may have challenges converting current assets into cash quickly without relying on inventory.

The cash ratio, which specifically measures the company's ability to cover current liabilities with cash and cash equivalents, has remained constant at 0.11 over the two years. A cash ratio of 0.11 means that Concentra has $0.11 in cash and cash equivalents for every $1 in current liabilities. This implies a relatively low level of cash reserves compared to its short-term obligations.

In summary, Concentra Group Holdings Parent, Inc. shows a moderate but slightly improving current ratio, indicating a reasonable ability to cover short-term obligations. However, the decreasing quick ratio suggests potential difficulties in quickly converting assets into cash. The consistent cash ratio at a relatively low level indicates a minimal cushion of cash reserves against current liabilities. Overall, while the current ratio appears satisfactory, the company may need to focus on improving the liquidity of its most liquid assets to strengthen its overall liquidity position.

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Additional liquidity measure

Given that the cash conversion cycle for Concentra Group Holdings Parent, Inc. has been consistently 0.00 days for the past three years (2021, 2022, and 2023), it indicates that the company efficiently converts its resources into cash flow within a very short period. A zero cash conversion cycle suggests that the company is able to quickly convert its inventory into sales, collect receivables promptly, and pay its payables in a timely manner. This efficient cycle signifies effective working capital management and operational effectiveness within the organization. Additionally, a zero cash conversion cycle points towards a streamlined and optimized business process, where resources are effectively utilized, and cash flow is managed efficiently.