Six Flags Entertainment Corporation (FUN)

Six Flags Entertainment Corporation's liquidity ratios have shown a declining trend over the period from December 31, 2020, to December 31, 2024.

1. Current Ratio: The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 1.85 in 2020 to 0.43 in 2024. This indicates a significant reduction in the company's liquidity position over the years.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, takes into account only the most liquid assets to cover short-term liabilities. The quick ratio dropped from 1.26 in 2020 to 0.27 in 2024, reflecting a substantial decrease in the company's ability to meet its immediate obligations.

3. Cash Ratio: The cash ratio, which specifically focuses on the company's ability to cover its current liabilities with its cash and cash equivalents, decreased from 1.26 in 2020 to 0.09 in 2024. This highlights a significant erosion in the company's cash reserves relative to its short-term obligations.

Overall, the declining trends in Six Flags Entertainment Corporation's liquidity ratios from 2020 to 2024 indicate a weakening liquidity position, suggesting potential challenges in meeting its short-term financial commitments. Investors and stakeholders may need to closely monitor the company's liquidity management strategies to ensure financial stability.

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Additional liquidity measure

The cash conversion cycle of Six Flags Entertainment Corporation has shown a significant improvement over the period from December 31, 2020, to December 31, 2024. In 2020, the cash conversion cycle was 619.12 days, indicating a lengthy time for the company to convert its investments in inventory and accounts receivable into cash.

However, by December 31, 2024, the cash conversion cycle had decreased to 9.15 days, reflecting a substantial enhancement in the company's efficiency in managing its working capital. This reduction suggests that Six Flags has been able to streamline its operations, optimize inventory levels, and expedite the collection of receivables, resulting in a faster conversion of resources into cash.

Overall, the trend in the cash conversion cycle demonstrates Six Flags' improvement in its liquidity position and ability to efficiently manage its cash flow over the analyzed period.