California Resources Corp (CRC)

California Resources Corporation's liquidity ratios have shown improvement over the past three years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has consistently increased from 0.88 in 2021 to 0.97 in 2022 and further to 1.51 in 2023. This indicates a positive trend in the company's short-term liquidity position.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also improved over the years. The quick ratio increased from 0.79 in 2021 to 0.89 in 2022 and further to 1.37 in 2023, indicating the company's enhanced ability to cover immediate liabilities with its most liquid assets.

Furthermore, the cash ratio, which focuses solely on the company's ability to cover short-term liabilities with cash and cash equivalents, has also displayed a positive trend. The cash ratio increased from 0.50 in 2021 to 0.53 in 2022 and notably rose to 1.02 in 2023, reflecting an improved cash position relative to short-term obligations.

Overall, California Resources Corporation's liquidity ratios have shown significant improvement over the three-year period, signaling a strengthened ability to meet its short-term financial commitments and suggesting enhanced financial stability.

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Additional liquidity measure

The cash conversion cycle of California Resources Corporation has shown a significant improvement over the past three years. In 2021, the company had a cash conversion cycle of 47.34 days, which decreased to 43.96 days in 2022 and further decreased to 28.15 days in 2023. This indicates that the company has been able to manage its working capital more efficiently, allowing it to convert its inventory and accounts receivable into cash at a faster rate.

A lower cash conversion cycle implies that the company is able to generate cash more quickly from its operational activities, which is a positive sign of efficient working capital management. The decreasing trend in the cash conversion cycle over the years suggests that California Resources Corporation has been improving its inventory turnover and collection of accounts receivable, reducing the time it takes for the company to convert its investments in inventory and accounts receivable into cash.

Overall, the decreasing trend in the cash conversion cycle is a positive indicator of the company's operational efficiency and liquidity management. It shows that California Resources Corporation has been successful in optimizing its working capital and improving its cash flow generation capabilities over the years.