Caesars Entertainment Corporation (CZR)

Caesars Entertainment Corporation's liquidity ratios have shown a declining trend over the analyzed period. The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, decreased from 2.41 in 2020 to 0.77 in 2024. This indicates a potential weakening in the company's short-term financial stability.

The quick ratio, a more stringent measure of liquidity that excludes inventories from current assets, also declined from 1.66 in 2020 to 0.59 in 2024. This suggests that Caesars may face challenges in meeting its immediate liabilities with its most liquid assets.

Furthermore, the cash ratio, which focuses solely on cash and cash equivalents to cover current liabilities, dropped from 1.51 in 2020 to 0.38 in 2024. This indicates a decreasing ability to settle current debts solely with available cash.

Overall, the decreasing trend in all three liquidity ratios suggests that Caesars Entertainment Corporation may be experiencing liquidity challenges and should carefully monitor its ability to meet short-term obligations in the future.

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Additional liquidity measure

The cash conversion cycle of Caesars Entertainment Corporation has fluctuated significantly over the past five years.

As of December 31, 2020, the company's cash conversion cycle stood at 38.64 days, indicating that it took approximately 39 days for Caesars to convert its investments in inventory and accounts receivable into cash inflows from sales.

By December 31, 2021, there was a substantial improvement in the cash conversion cycle, reducing to 4.41 days. This suggests that Caesars was more efficient in managing its working capital and turning its assets into cash.

The trend continued to improve in the following years, with the cash conversion cycle remaining low at 4.91 days as of December 31, 2022. This demonstrates continued efficiency in converting resources into cash quickly.

However, there was a sharp reversal in the trend by December 31, 2023, with a negative cash conversion cycle of -11.78 days. This could indicate aggressive management of working capital, potentially focusing more on accelerating cash flows rather than maintaining optimal levels of inventory and receivables.

By December 31, 2024, the negative trend continued, with a cash conversion cycle of -8.96 days. While a negative cycle can be advantageous in the short term, it may also signal potential risks such as overtrading or compromise of quality for speed.

Overall, the fluctuating cash conversion cycle of Caesars Entertainment Corporation indicates varying levels of operational efficiency and working capital management over the past five years. It would be valuable for stakeholders to closely monitor this metric to ensure sustainable and balanced financial performance.