Liberty Oilfield Services Inc (LBRT)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.27 | 1.23 | 1.35 | 1.48 | 1.49 | 1.34 | 1.44 | 1.42 | 1.47 | 1.41 | 1.35 | 1.22 | 1.11 | 1.32 | 1.36 | 1.48 | 1.59 | 2.03 | 2.97 | 1.83 |
| Quick ratio | 0.31 | 0.28 | 0.35 | 0.37 | 0.35 | 0.30 | 0.31 | 1.00 | 0.97 | 1.01 | 0.97 | 0.88 | 0.75 | 0.92 | 0.99 | 1.04 | 1.14 | 1.38 | 1.91 | 1.38 |
| Cash ratio | 0.03 | 0.03 | 0.04 | 0.04 | 0.06 | 0.03 | 0.04 | 0.03 | 0.07 | 0.03 | 0.07 | 0.05 | 0.04 | 0.07 | 0.06 | 0.18 | 0.19 | 0.51 | 1.23 | 0.20 |
Based on the provided data, the liquidity ratios of Liberty Oilfield Services Inc display fluctuations over time.
1. Current Ratio:
The current ratio measures the company's ability to meet its short-term obligations using its current assets. Liberty Oilfield Services Inc experienced a steady decline in its current ratio from June 2021 to December 2021, indicating potential difficulties in meeting its short-term liabilities. However, the ratio showed some improvement in the following periods before dropping again by the end of December 2024. The current ratio ranged from a high of 2.97 in June 2020 to a low of 1.11 in December 2021.
2. Quick Ratio:
The quick ratio provides a more stringent measure of liquidity by excluding inventory from current assets. Liberty Oilfield Services Inc's quick ratio also exhibited fluctuations, with a similar declining trend as the current ratio. The quick ratio ranged from a high of 1.91 in June 2020 to a low of 0.28 in September 2024. The ratio consistently decreased from March 2023 to December 2024, indicating potential challenges in meeting immediate obligations without relying on inventory.
3. Cash Ratio:
The cash ratio specifically focuses on the company's ability to cover its current liabilities with cash and cash equivalents. Liberty Oilfield Services Inc's cash ratio showed a considerable decline from June 2020 to December 2021, indicating a decreasing ability to cover short-term liabilities with cash on hand. The ratio fluctuated in subsequent periods but generally remained low, ranging from a high of 1.23 in June 2020 to a low of 0.03 in September 2024.
In summary, Liberty Oilfield Services Inc's liquidity ratios have shown mixed performance over the reviewed periods, with fluctuations in the current ratio, quick ratio, and cash ratio. The company may need to closely monitor its liquidity position and implement appropriate strategies to ensure it can meet its short-term obligations effectively.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 4.02 | -0.57 | 3.58 | 6.49 | 5.59 | 0.99 | -1.38 | 35.83 | 39.25 | 46.96 | 47.49 | 41.63 | 36.52 | 56.71 | 92.69 | 99.97 | 99.64 | 50.02 | 31.35 | 59.15 |
The cash conversion cycle of Liberty Oilfield Services Inc has shown fluctuations over the period analyzed. The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash from sales.
From March 31, 2020, to June 30, 2020, the company managed to significantly reduce its cash conversion cycle from 59.15 days to 31.35 days, indicating more efficient management of its working capital. However, the cycle increased to 99.64 days by December 31, 2020, reflecting a prolonged period between paying for inventory and receiving cash from sales.
The cycle remained high in the following quarters but started improving from March 31, 2022, when it decreased to 35.83 days. Subsequently, there were further fluctuations, with the cycle turning negative on June 30, 2023, and September 30, 2024, indicating that the company was able to receive cash from sales before paying its suppliers.
The decrease in the cash conversion cycle suggests that Liberty Oilfield Services Inc has been managing its inventory, accounts receivable, and accounts payable more efficiently in recent periods. A shorter cash conversion cycle generally indicates improved liquidity and working capital management, allowing the company to generate cash flow more quickly from its operating activities.