MGM Resorts International (MGM)

Based on the data provided for MGM Resorts International, we can analyze the liquidity ratios over the past five years.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. A current ratio above 1 indicates that the company has more than enough current assets to cover its current liabilities. MGM Resorts International's current ratio has been fluctuating over the years, with a notable decrease from 3.21 in 2020 to 1.57 in 2023. This indicates a potential decrease in the company's ability to cover its short-term obligations with its current assets.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more stringent liquidity measure that excludes inventory from current assets. A quick ratio above 1 suggests that the company can meet its short-term obligations without relying on the sale of inventory. Similar to the current ratio, MGM Resorts International's quick ratio has also shown a decreasing trend, from 3.16 in 2020 to 1.53 in 2023, indicating a potential decline in the company's ability to cover its short-term liabilities with its most liquid assets.

3. Cash Ratio: The cash ratio is the most conservative liquidity ratio, focusing solely on a company's ability to cover its short-term liabilities with its cash and cash equivalents. MGM Resorts International's cash ratio has fluctuated over the years, showing a decrease from 2.86 in 2020 to 1.18 in 2023. This suggests that the company may have a lower proportion of cash and cash equivalents relative to its short-term liabilities.

Overall, the trend in MGM Resorts International's liquidity ratios over the past five years indicates a potential decrease in the company's ability to cover its short-term obligations with its current assets and liquid resources. It would be important for stakeholders to further evaluate the company's liquidity management strategies and financial position to assess any potential risks associated with its liquidity levels.

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Additional liquidity measure

MGM Resorts International's cash conversion cycle has shown a declining trend over the past five years. The company's ability to convert its investments in inventory and accounts receivable into cash has improved, as reflected in the decreasing days in the cycle.

In 2023, the cash conversion cycle was the lowest at 10.52 days, indicating that MGM Resorts International is managing its working capital more efficiently compared to previous years. This suggests that the company is collecting cash from its customers and converting inventory into sales at a faster rate.

The decreasing trend in the cash conversion cycle is a positive sign for the company's liquidity and operational efficiency. It indicates that MGM Resorts International has been able to streamline its operations and manage its working capital effectively, which could lead to improved financial performance in the future.