Clearway Energy Inc Class C (CWEN)

Based on the provided data, Clearway Energy Inc Class C's liquidity ratios have shown some fluctuations over the years under review:

1. Current Ratio:
- The current ratio indicates the company's ability to cover its short-term liabilities with its current assets.
- In 2020, the current ratio was 1.12, suggesting that Clearway Energy Inc Class C had just enough current assets to cover its current liabilities.
- In 2021, the ratio decreased to 0.94, indicating a potential liquidity concern as the company may have had difficulty meeting its short-term obligations.
- The ratio significantly improved in 2022 to 2.07, suggesting a healthier liquidity position for the company.
- However, in subsequent years, the current ratio remained above 1, indicating that Clearway Energy Inc Class C generally had enough current assets to cover its current liabilities, although the ratio declined slightly in 2024 to 1.49.

2. Quick Ratio:
- The quick ratio provides a more conservative measure of liquidity by excluding inventory from current assets.
- Clearway Energy Inc Class C's quick ratio was relatively low in 2020 at 0.65, indicating a potential strain on the company's ability to meet its short-term obligations without relying on inventory.
- The ratio dropped significantly to 0.20 in 2021, signaling a decreased ability to cover immediate liabilities with its most liquid assets.
- Subsequently, there was an improvement in 2022 with a quick ratio of 1.31, suggesting a stronger liquidity position.
- However, the ratio declined in the following years, signaling potential challenges in meeting short-term obligations without relying on inventory.

3. Cash Ratio:
- The cash ratio specifically measures a company's ability to cover its current liabilities with cash and cash equivalents.
- Clearway Energy Inc Class C had a low cash ratio in 2020 at 0.42, indicating a limited ability to cover its current liabilities with cash on hand.
- The ratio decreased further in 2021 to 0.11, suggesting a potential cash flow challenge for the company.
- The cash ratio improved notably in 2022 to 1.06, indicating a stronger ability to meet short-term obligations with cash and cash equivalents.
- However, the ratio declined in the subsequent years, albeit remaining above 0.5, indicating a varying ability to cover current liabilities with cash reserves.

Overall, Clearway Energy Inc Class C's liquidity ratios have shown varying trends over the years, with improvements in some ratios indicating enhanced liquidity positions in certain periods, while declines in others suggest potential liquidity challenges. It is important for the company to closely monitor these ratios to ensure it can meet its short-term financial obligations effectively.

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Additional liquidity measure

The cash conversion cycle is a key indicator of a company's efficiency in managing its working capital. Looking at Clearway Energy Inc Class C's cash conversion cycle over the years, we can see significant fluctuations.

In 2020, the company's cash conversion cycle was 13.61 days, which implies that it took Clearway Energy approximately 13 days to convert its investments in inventory and other resources into cash flow from sales.

By the end of 2021, the cash conversion cycle improved to 10.93 days, indicating a more efficient management of working capital, leading to quicker conversions of investments into cash.

However, in 2022, the cash conversion cycle increased substantially to 40.22 days, suggesting a potential inefficiency in managing working capital. This longer cycle may indicate a delay in converting investments into cash flow.

The situation worsened in 2023 when the cash conversion cycle turned negative at -57.88 days, which is unusual and may indicate an anomaly or potentially aggressive management of working capital. It could also suggest a delay in paying suppliers compared to collecting cash from customers.

By the end of 2024, the cash conversion cycle rebounded to 46.63 days, which again indicates a lengthier cycle than desired and may point to challenges in working capital management.

Overall, Clearway Energy Inc Class C's cash conversion cycle has been volatile over the years, signaling fluctuations in efficiency in managing working capital and converting investments into cash. Further analysis of the underlying reasons for these fluctuations would be necessary to understand the company's working capital dynamics comprehensively.