Frontier Communications Parent Inc (FYBR)

Frontier Communications Parent Inc's liquidity ratios provide insights into its ability to meet short-term obligations and manage its current financial resources effectively.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some fluctuations over the past five years. In 2021, the current ratio was relatively high at 1.85, indicating a healthy liquidity position. However, the ratio dropped significantly in 2020 to 0.37, suggesting potential liquidity challenges during that period. The ratio improved in 2023 to 1.22, indicating a better ability to cover short-term obligations compared to the prior year.

The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. While the quick ratio follows a similar trend to the current ratio, it often provides a more accurate reflection of a company's immediate liquidity position. Frontier Communications Parent Inc's quick ratio has also experienced fluctuations, with the ratio improving in 2023 to 1.16, indicating a more favorable liquidity position than in 2022.

The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, reflects Frontier Communications' ability to settle short-term obligations with its most liquid assets. The cash ratio has shown a generally positive trend over the past five years, with improvements seen in 2023 compared to 2022.

Overall, while Frontier Communications Parent Inc's liquidity ratios have shown some fluctuations over the years, the company seems to have improved its liquidity position in 2023 compared to previous years. However, it should continue to monitor and manage its liquidity effectively to ensure its ability to meet short-term obligations without facing financial constraints.

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Additional liquidity measure

The cash conversion cycle for Frontier Communications Parent Inc has fluctuated over the past five years, ranging from -70.60 days in 2022 to -11.13 days in 2019. The negative values indicate that the company's operating cycle is shorter than its cash cycle, implying efficient management of cash flows.

In 2023, the cash conversion cycle improved to -46.35 days compared to the previous year, indicating a more efficient conversion of resources into cash. This improvement suggests that Frontier Communications Parent Inc has been able to reduce the time it takes to convert its investments in inventory and accounts receivable into cash, potentially enhancing liquidity and operating efficiency.

However, it is worth noting that the cash conversion cycle fluctuated over the years, which could be influenced by various factors such as changes in sales volumes, inventory management practices, and collection policies. Continuous monitoring and analysis of this metric can help management identify areas for improvement in working capital management and optimize cash flow performance.