Caesars Entertainment Corporation (CZR)

Caesars Entertainment Inc's liquidity ratios have shown fluctuations over the past five years.

The current ratio, which indicates the company's ability to meet short-term obligations with its current assets, has been decreasing from 2.58 in 2020 to 0.76 in 2023. A current ratio below 1 signifies that the company may have difficulty in meeting its short-term liabilities.

The quick ratio, a more stringent liquidity measure that excludes inventory from the current assets, has also been on a downward trend, falling from 0.92 in 2020 to 0.70 in 2023. This suggests that the company may struggle to meet its short-term obligations without relying on selling inventory.

The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has shown fluctuations, ranging from 0.26 in 2021 to 0.47 in 2023. While the cash ratio has improved in 2023 compared to 2021, indicating a higher proportion of cash to cover short-term obligations, it is still relatively low.

Overall, the liquidity ratios of Caesars Entertainment Inc have raised concerns about its ability to meet short-term obligations comfortably. The decreasing trend in current and quick ratios, along with the relatively low cash ratio, suggests that the company may need to improve its liquidity position to avoid potential liquidity issues in the future.

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Additional liquidity measure

The cash conversion cycle is a measure of how efficiently a company manages its cash flows related to its operations. Caesars Entertainment Inc's cash conversion cycle has varied over the past five years. In 2023, the company's cash conversion cycle was negative at -5.24 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash quickly.

However, in 2022 and 2021, the company's cash conversion cycle was positive at 3.38 days and 1.35 days respectively, suggesting a longer time taken to convert its investments into cash. This could indicate potential inefficiencies in managing inventory and collections from customers during these periods.

In 2020, the cash conversion cycle significantly increased to 15.16 days, reflecting a prolonged time to convert investments into cash, which may have been influenced by various internal or external factors impacting the company's operations.

In 2019, the company experienced another negative cash conversion cycle at -5.08 days, similar to 2023, indicating a swift conversion of investments into cash.

Overall, fluctuations in Caesars Entertainment Inc's cash conversion cycle over the years suggest varying efficiencies in managing working capital and cash flows, impacting the company's liquidity and operational performance. Monitoring and improving the cash conversion cycle can help the company enhance its financial health and sustainability.