MGM Resorts International (MGM)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.57 | 1.78 | 2.04 | 2.19 | 1.81 | 1.49 | 1.65 | 1.25 | 1.86 | 1.96 | 3.23 | 3.86 | 3.21 | 2.24 | 2.47 | 2.89 | 1.26 | 0.87 | 0.73 | 0.78 |
| Quick ratio | 1.28 | 1.45 | 1.70 | 1.85 | 1.51 | 1.06 | 1.21 | 1.01 | 1.63 | 1.87 | 3.15 | 4.47 | 3.83 | 2.64 | 2.35 | 2.76 | 1.16 | 0.77 | 0.63 | 0.66 |
| Cash ratio | 0.94 | 1.12 | 1.40 | 1.58 | 1.31 | 0.90 | 1.04 | 0.78 | 1.39 | 1.66 | 2.82 | 4.15 | 3.53 | 2.19 | 1.88 | 2.29 | 0.73 | 0.37 | 0.42 | 0.43 |
MGM Resorts International's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term financial obligations.
The current ratio has shown a fluctuating trend over the past eight quarters, ranging from 1.25 to 2.19. Generally, a current ratio above 1 indicates that the company has more current assets than current liabilities. MGM Resorts International's current ratio has varied but has generally remained above 1, suggesting that the company can cover its short-term liabilities with its current assets.
The quick ratio, which excludes inventory from current assets, provides a more stringent measure of liquidity. MGM Resorts International's quick ratio has also shown fluctuations but has consistently remained above 1, indicating the company's ability to meet short-term obligations without relying on inventory.
Lastly, the cash ratio measures the proportion of cash and cash equivalents to current liabilities. MGM Resorts International's cash ratio has shown a similar fluctuating trend but has generally remained above 1, which means the company has sufficient cash to cover its current liabilities without relying on other current assets.
Overall, based on these liquidity ratios, MGM Resorts International appears to have maintained a reasonable level of liquidity over the quarters analyzed, allowing it to meet its short-term financial obligations. However, the fluctuations in the ratios suggest that the company's liquidity position may have been impacted by changing economic conditions or other factors.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 3.80 | 8.69 | 10.69 | 7.29 | 11.17 | 6.40 | 3.46 | 12.35 | 15.42 | 17.45 | 27.33 | 48.54 | 29.04 | 54.44 | 43.48 | 25.71 | 27.64 | 23.31 | -0.49 | -5.80 |
The cash conversion cycle measures how long it takes for a company like MGM Resorts International to convert its investments in inventory and other resources into cash flows from sales. Looking at the data provided, we can see that MGM's cash conversion cycle has fluctuated over the past eight quarters.
In Q1 2022, the cash conversion cycle stood at 16.03 days, indicating that it took MGM about 16 days to convert its investments into cash. This was followed by a decrease in Q2 and Q3 2022, with the cycle dropping to 12.93 days and 10.68 days, respectively. However, in Q4 2022, the cycle increased to 12.35 days.
Moving into 2023, the cash conversion cycle continued to vary. In Q1 2023, the cycle decreased significantly to 8.37 days, suggesting an improvement in MGM's efficiency in converting investments into cash. Subsequently, in Q2 2023, the cycle increased slightly to 9.65 days but remained relatively low. Q3 and Q4 2023 saw the cycle stabilize around 10.48 days and 10.52 days, respectively.
Overall, MGM Resorts International has shown some fluctuations in its cash conversion cycle in recent quarters. The company has made progress in managing its working capital efficiently, as evidenced by the decreasing trend in the cycle duration from Q1 2022 to Q1 2023. It is important for MGM to continuously monitor and optimize its cash conversion cycle to ensure effective cash flow management and liquidity.