Green Plains Renewable Energy Inc (GPRE)

Green Plains Renewable Energy Inc's current ratio has shown fluctuation over the years, starting at 1.42 in 2020, peaking at 2.37 in 2021, and then trending downwards to 1.48 in 2024. Despite the variability, the current ratio has generally remained above 1, indicating that the company has had sufficient current assets to cover its current liabilities.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also demonstrates variation in Green Plains Renewable Energy Inc's liquidity position. The quick ratio improved from 0.65 in 2020 to 1.42 in 2021 but then decreased to 0.69 in 2024. This fluctuation suggests some volatility in the company's ability to meet its short-term obligations without relying on inventory.

The cash ratio, which focuses solely on cash and cash equivalents compared to current liabilities, reflects a similar trend of fluctuation in Green Plains Renewable Energy Inc's liquidity position. The cash ratio has shown an increase from 0.53 in 2020 to 1.17 in 2021 before declining to 0.45 in 2024. This implies that the company may have less cash available to cover its short-term liabilities in the most recent year.

Overall, while the company's liquidity ratios have shown some variability, with improvements in certain years and declines in others, Green Plains Renewable Energy Inc has generally maintained a sufficient level of liquidity to meet its short-term obligations. However, the downward trends in some ratios in recent years may warrant further analysis to ensure the company's liquidity position remains stable and adequate.

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Additional liquidity measure

The cash conversion cycle of Green Plains Renewable Energy Inc has shown a declining trend over the years, indicating an improvement in its efficiency in managing cash flows. As of December 31, 2020, the cash conversion cycle stood at 28.65 days, which decreased to 22.48 days by December 31, 2021. Subsequently, there was a significant drop to 9.17 days by December 31, 2022, followed by a slight decrease to 8.58 days by December 31, 2023. However, by December 31, 2024, there was a slight increase to 17.87 days, albeit still lower than the initial figure. Overall, the decreasing trend in the cash conversion cycle suggests that Green Plains Renewable Energy Inc has been efficient in managing its working capital and converting its investments in raw materials into cash.