HF Sinclair Corp (DINO)

HF Sinclair Corp's liquidity ratios have been relatively stable over the past eight quarters. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, averaged 2.13 over this period, indicating a consistent ability to meet its short-term obligations. The company's current ratio peaked at 2.32 in Q2 2023, reflecting strong liquidity, while the lowest value was observed in Q1 2022 at 1.73.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, averaged 1.09 over the eight quarters. HF Sinclair Corp's quick ratio saw fluctuations but remained above 1 in most quarters, reflecting a healthy ability to meet short-term obligations without relying on inventory. The highest quick ratio was 1.23 in Q3 2023, and the lowest was 0.81 in Q1 2022.

The cash ratio, which provides the most conservative measure of liquidity by considering only cash and cash equivalents, averaged 0.48 over the period. HF Sinclair Corp's cash ratio ranged from 0.19 in Q1 2022 to 0.66 in Q3 2023, showing variability in the company's cash position relative to its current liabilities.

Overall, HF Sinclair Corp's liquidity ratios suggest a generally stable and sound liquidity position, with the current and quick ratios consistently above industry standards of 1 and the cash ratio indicating a prudent level of cash reserves to cover immediate obligations. It is important for the company to maintain a healthy liquidity position to withstand unexpected financial challenges and capitalize on growth opportunities.

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Additional liquidity measure

The cash conversion cycle of HF Sinclair Corp. has shown fluctuations over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash inflows. A shorter cash conversion cycle indicates a more efficient use of resources and quicker turnover of inventory.

In Q4 2023, the company's cash conversion cycle was 30.38 days, which was an improvement compared to Q3 2023 (32.24 days). This suggests that the company was able to manage its working capital more effectively and convert inventory into cash quicker in the most recent quarter.

Looking at the trend over the past year, the cash conversion cycle has generally been decreasing since Q2 2022, with some fluctuations in between. This downward trend indicates the company's efforts to streamline operations and improve efficiency in converting inventory to cash.

However, comparing the current Q4 2023 cycle to the same quarter in the previous year (Q4 2022), there has been an increase from 27.24 days to 30.38 days. This might indicate that there were challenges in managing working capital efficiently in the most recent quarter compared to the same period last year.

Overall, while the recent quarter's performance was an improvement from the previous quarter, there is a need to closely monitor the cash conversion cycle to ensure that the company continues to optimize its working capital management and operational efficiency.