Golden Entertainment Inc (GDEN)

Based on the provided data, let's analyze the liquidity ratios of Golden Entertainment Inc:

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. A higher current ratio indicates a stronger liquidity position.
- Golden Entertainment Inc's current ratio has fluctuated over the years. It increased from 1.19 in 2020 to 2.35 in 2023, indicating improved short-term liquidity. However, it declined to 1.03 in 2024, which may raise concerns about the company's ability to meet its short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. A ratio greater than 1 suggests that the company can meet its short-term liabilities without relying on selling inventory.
- Golden Entertainment Inc's quick ratio shows fluctuations as well. It improved from 0.87 in 2020 to 1.74 in 2021, indicating a better ability to meet short-term obligations. However, it decreased to 0.57 in 2024, which may indicate potential challenges in covering short-term liabilities without relying on inventory.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio as it measures the company's ability to cover its current liabilities with cash and cash equivalents alone. A higher cash ratio signifies a stronger ability to meet short-term obligations without relying on other current assets.
- Golden Entertainment Inc's cash ratio fluctuated in line with the quick ratio. It increased from 0.87 in 2020 to 1.74 in 2021, reflecting a stronger cash position. However, it declined to 0.57 in 2024, which could suggest a reduced capacity to cover short-term liabilities solely with cash and cash equivalents.

In conclusion, while Golden Entertainment Inc showed improvements in liquidity ratios over the years, the declining trend in 2024, especially in the quick and cash ratios, may require further investigation to assess the company's ability to maintain adequate liquidity to meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle for Golden Entertainment Inc has seen fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle stood at 5.05 days, indicating the time it takes for the company to convert its investments in inventory and other resources into cash. By December 31, 2021, the cycle improved to 4.15 days, suggesting a more efficient management of working capital.

However, by December 31, 2022, the cash conversion cycle increased slightly to 4.80 days, before further extending to 5.12 days by December 31, 2023. The uptick in this period could possibly highlight challenges in managing receivables or inventory turnover rates within the company.

Notably, by December 31, 2024, the cash conversion cycle spiked to 10.03 days, signaling a significant delay in the company's cash conversion process. This prolonged cycle may indicate potential issues with liquidity management or inefficiencies in the company's operations that could impact its overall financial health.