Comstock Resources Inc (CRK)

Comstock Resources Inc's liquidity ratios show a concerning trend over the years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has fluctuated between 0.45 and 0.85 from 2020 to 2024. While the ratio improved in 2022, reaching 0.85, it declined to 0.46 by the end of 2024, indicating potential challenges in meeting current liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has been consistently low, ranging from 0.01 to 0.07 during the same period. This suggests that Comstock Resources may struggle to meet its short-term obligations without relying on inventory liquidation.

Similarly, the cash ratio, which indicates the company's ability to meet immediate liabilities with cash and cash equivalents, has remained at a very low level of 0.01 to 0.07 over the years. This indicates that Comstock Resources may have insufficient cash reserves to cover its short-term obligations without relying on other assets or external financing.

Overall, the declining current ratio and consistently low quick and cash ratios suggest that Comstock Resources Inc may face liquidity challenges in the future, potentially impacting its ability to meet its financial obligations promptly.

---

Additional liquidity measure

The cash conversion cycle of Comstock Resources Inc has experienced fluctuations over the years based on the provided data.

As of December 31, 2020, the company's cash conversion cycle was 1.70 days, indicating that it efficiently converted its investments in inventory and receivables into cash.

However, by December 31, 2021, the cash conversion cycle increased to 2.43 days, suggesting a slight delay in the company's ability to convert its resources into cash.

The trend continued into December 31, 2022, where the cash conversion cycle significantly extended to 9.78 days, indicating a significant slowdown in the company's cash conversion efficiency.

Remarkably, by December 31, 2023, and December 31, 2024, the cash conversion cycle improved drastically, reaching 0.00 days for both years. This implies that the company was able to convert its investments into cash almost instantaneously during these periods.

Overall, fluctuations in the cash conversion cycle highlight the company's efficiency in managing its working capital and the effectiveness of its cash flow management strategies over the years.