Helix Energy Solutions Group Inc (HLX)

The current ratio of Helix Energy Solutions Group Inc has shown fluctuations over the reporting periods, with a general increasing trend from March 31, 2020, to September 30, 2022, indicating improving liquidity. However, there was a notable decrease in the current ratio in the subsequent periods until December 31, 2024. Despite the variations, the current ratio has generally remained above 1, suggesting that the company has had sufficient current assets to cover its current liabilities.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also exhibited fluctuations over the periods. Similar to the current ratio, the quick ratio generally improved from March 31, 2020, to June 30, 2022, before experiencing a decline in the following quarters. While the quick ratio fell below 1 at certain points, indicating potential challenges in meeting short-term obligations without relying on inventory, it generally remained relatively stable over the periods.

The cash ratio, which is the most conservative liquidity ratio as it only includes cash and cash equivalents in the numerator, has followed a similar pattern to the quick ratio, demonstrating fluctuations but with an overall stability in most periods. The cash ratio maintained values above 0.4 throughout the reporting periods, except for some quarters where it dipped slightly lower, indicating that the company generally had a sufficient level of cash to cover current liabilities without relying on other current assets.

In summary, the liquidity ratios of Helix Energy Solutions Group Inc have shown variability over the years, with the current ratio generally indicating improving liquidity until a decline in recent periods. The quick and cash ratios, providing more stringent measures of liquidity, have remained relatively stable, though showing some fluctuations. Overall, these ratios suggest that the company has managed its liquidity adequately, with varying levels of short-term solvency throughout the reporting periods.

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Additional liquidity measure

The cash conversion cycle (CCC) is a metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash received from sales. It consists of three key components: days inventory outstanding (DIO), days sales outstanding (DSO), and days payable outstanding (DPO).

Analyzing the data provided for Helix Energy Solutions Group Inc, we observe fluctuations in the CCC over various quarters. The CCC decreased from 29.75 days on March 31, 2020, to 23.65 days on June 30, 2020, indicating an improvement in the company's efficiency in managing its working capital.

Significantly, the CCC reached 0.00 days on both September 30, 2020, and December 31, 2020, showcasing a period where the company efficiently converted its investments into cash and back into new investments in minimal time.

However, there was an increase in the CCC to 56.86 days on September 30, 2021, suggesting prolonged cycles in converting resources to cash during that period. Subsequently, the CCC trended downwards to 0.00 days by March 31, 2023, indicating efficient working capital management.

From June 30, 2024, there was an uptick in the CCC to 10.84 days, suggesting a slight delay in the conversion of investments into cash during that quarter.

It is essential for Helix Energy Solutions Group Inc to monitor and manage its cash conversion cycle effectively to optimize its working capital and ensure efficient operations and financial health. Tracking this metric can help the company identify areas for improvement in managing its inventory, receivables, and payables to enhance its overall financial performance.