Warrior Met Coal Inc (HCC)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 5.20 | 7.24 | 7.66 | 5.14 | 2.74 |
| Quick ratio | 3.80 | 5.81 | 6.49 | 4.38 | 1.81 |
| Cash ratio | 2.97 | 5.06 | 5.47 | 3.31 | 1.29 |
Warrior Met Coal Inc's liquidity ratios have shown a consistent improvement over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has increased from 2.74 in 2020 to 5.20 in 2024. This indicates that the company has strengthened its liquidity position and is more capable of meeting its short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a positive trend, rising from 1.81 in 2020 to 3.80 in 2024. This suggests that Warrior Met Coal Inc has a stronger ability to meet its immediate payment obligations without relying on selling its inventory.
Furthermore, the cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) relative to current liabilities, has improved significantly from 1.29 in 2020 to 2.97 in 2024. This indicates that the company has a good level of cash reserves to cover its short-term liabilities without relying on other current assets.
Overall, Warrior Met Coal Inc's liquidity ratios demonstrate a healthy financial position, with improving levels of liquidity and the ability to handle short-term financial commitments effectively.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 81.93 | 70.70 | 77.05 | 58.85 | 69.90 |
Warrior Met Coal Inc's cash conversion cycle has shown some fluctuations over the years. The company's cash conversion cycle was 69.90 days as of December 31, 2020, decreased to 58.85 days by December 31, 2021, and then increased to 77.05 days by December 31, 2022. Subsequently, it decreased to 70.70 days by December 31, 2023, before increasing again to 81.93 days by December 31, 2024.
This trend indicates that Warrior Met Coal Inc has made some improvements in managing its cash conversion cycle in the near term, but challenges may have arisen in translating sales into cash in the more recent periods. A longer cash conversion cycle may signify inefficiencies in collection from customers or managing payables, impacting the company's liquidity and overall financial health. Monitoring and optimizing the cash conversion cycle is crucial for maintaining a healthy cash flow position and sustainable operations.