Helix Energy Solutions Group Inc (HLX)

The liquidity ratios of Helix Energy Solutions Group Inc show consistent performance over the past five years.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has been relatively stable within the range of 1.54 to 1.90. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is favorable. Helix Energy's current ratio has been consistently above 1, reflecting a healthy liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Helix Energy's quick ratio has fluctuated slightly over the years but generally remained above 1, indicating that the company can meet its short-term obligations without relying on selling inventory. This suggests a solid ability to cover immediate liabilities with its most liquid assets.

The cash ratio, which is the most conservative liquidity ratio, focuses solely on cash and cash equivalents relative to current liabilities. Helix Energy's cash ratio has varied over the years but has generally remained close to or above 1. A cash ratio above 1 indicates that the company has enough cash on hand to cover its short-term debts outright. Although the cash ratio has seen some fluctuations, it generally reflects a prudent approach to managing liquidity risk.

Overall, based on the liquidity ratios analyzed, Helix Energy Solutions Group Inc appears to have maintained a sound liquidity position over the past five years, indicating the company's ability to meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Helix Energy Solutions Group Inc has fluctuated over the past five years, indicating variations in the efficiency of its working capital management. In 2023, the company's cash conversion cycle was 34.28 days, which represents the time taken to convert its investments in inventory and accounts receivable into cash from sales. This is an improvement from the previous year (28.92 days), suggesting a more efficient management of cash flows.

Comparing to 2021 and 2020, where the cash conversion cycles were 45.47 days and 63.03 days respectively, the company has made significant progress in optimizing its working capital usage. This improvement could be attributed to better inventory management practices and faster collection of receivables, leading to a shorter cash conversion cycle.

In contrast, the cash conversion cycle was notably lower in 2019 at 19.85 days, indicating a higher efficiency in converting its operational activities into cash. It is important for Helix Energy Solutions Group Inc to maintain a focus on continuously optimizing its cash conversion cycle to ensure effective working capital management and sustainable operations in the future.