California Resources Corp (CRC)

California Resources Corp's liquidity ratios have shown improvement over the years based on the provided data.

Starting with the current ratio, which measures the company's ability to cover its short-term obligations with its current assets, we see an upward trend from 0.69 in 2019 to 1.04 in 2024. This indicates that the company's short-term liquidity position has strengthened over time, with the ratio exceeding 1 in the most recent year, suggesting that it may be better able to meet its current liabilities.

Moving on to the quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, we observe a similar increasing trend from 0.41 in 2019 to 0.81 in 2024. This signifies that California Resources Corp has been enhancing its ability to meet its short-term obligations without relying on selling inventory.

Lastly, looking at the cash ratio, which provides the most conservative measure of liquidity by comparing cash and cash equivalents to current liabilities, we see a notable improvement from 0.02 in 2019 to 0.38 in 2024. This suggests that the company has significantly bolstered its ability to cover its current liabilities with readily available cash.

Overall, based on the increasing values of the current ratio, quick ratio, and cash ratio over the years, California Resources Corp has shown enhanced liquidity and a stronger ability to meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle for California Resources Corp has shown significant improvement over the years, transitioning from a positive 0.48 days as of December 31, 2019, to negative figures in subsequent years. Specifically, as of December 31, 2021, the company's cash conversion cycle was -171.87 days, reflecting a rapid conversion of inventory into cash. This trend continued with further reductions in 2022 (-285.81 days), 2023 (-143.81 days), and 2024 (-147.59 days).

The negative values indicate that California Resources Corp is efficiently managing its working capital, illustrating a faster conversion of inventory into sales and collection of receivables, leading to a shorter cash cycle. This efficient management of the cash conversion cycle suggests improved liquidity and financial health for the company, allowing it to operate more effectively and potentially invest in growth opportunities with the available cash.

Overall, the consistently decreasing cash conversion cycle over the years demonstrates California Resources Corp's ability to optimize its cash flow and streamline operational processes, ultimately enhancing its overall financial performance.