Six Flags Entertainment Corporation (FUN)

Six Flags Entertainment Corporation's liquidity ratios, particularly the current ratio, quick ratio, and cash ratio, have shown considerable variability over the past five years. In 2023, the current ratio stands at 0.52, indicating that the company may face challenges in meeting its short-term obligations with its current assets alone. This is a significant decline from the previous years, where the current ratio was higher, signaling improved liquidity positions.

The quick ratio for 2023 is recorded at 0.16, which is considerably low and suggests that Six Flags may struggle to cover its immediate liabilities with its most liquid assets. Similarly, the cash ratio for the same year is also at 0.16, reinforcing the notion that the company has limited liquid resources relative to its current liabilities.

Comparing these ratios to the figures from 2022 and prior years, a trend of declining liquidity can be observed, indicating potential financial strain for Six Flags Entertainment Corporation. It is essential for the company to closely monitor its liquidity position and take necessary steps to improve it to ensure ongoing operational stability.

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Additional liquidity measure

The cash conversion cycle of Six Flags Entertainment Corporation has shown significant fluctuations over the past five years. In Dec 31, 2023, the cash conversion cycle was 13.66 days, indicating a substantial improvement from the previous year. This suggests that the company was able to convert its inventory to cash more efficiently during this period.

In contrast, in Dec 31, 2022, the cash conversion cycle spiked to 100.66 days, representing a significant delay in converting inventory into cash. This could indicate potential issues with inventory management or collection of receivables during that year.

Dec 31, 2021 and Dec 31, 2019 also showed elevated cash conversion cycles of 104.22 days and 95.11 days respectively, which may have been influenced by operational challenges or industry-specific factors during those years.

The most notable outlier is Dec 31, 2020, where the cash conversion cycle skyrocketed to 619.12 days. This exceptionally long period indicates a severe inefficiency in converting inventory to cash and collecting receivables, which could have been due to disruptions or crises affecting the company's operations.

Overall, the fluctuating trend in the cash conversion cycle of Six Flags Entertainment Corporation over the past five years highlights the importance of closely monitoring operational efficiency and working capital management to ensure sustainable financial performance.