MGM Resorts International (MGM)

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 1.30 1.24 1.47 1.51 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
Quick ratio 0.72 0.76 0.80 0.90 0.94 1.12 1.40 1.58 1.31 0.90 1.12 0.76 1.37 1.91 3.49 4.15 3.53 2.19 1.88 2.29
Cash ratio 0.72 0.76 0.80 0.90 0.94 1.12 1.40 1.58 1.31 0.90 1.12 0.76 1.37 1.91 3.49 4.15 3.53 2.19 1.88 2.29

Based on the provided data for MGM Resorts International, the current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, shows a fluctuating trend over the years. The current ratio peaked at 3.86 in March 31, 2021, indicating strong liquidity, but declined significantly to 1.24 by September 30, 2024, raising concerns about the company's short-term solvency.

The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets. Like the current ratio, the quick ratio exhibits variability, reaching a high of 4.15 on March 31, 2021, before dropping to 0.72 on December 31, 2024. This suggests a decreasing ability to meet short-term obligations without relying on inventory sales.

Furthermore, the cash ratio, which evaluates a company's ability to cover immediate liabilities with cash and cash equivalents, follows a similar pattern to the quick ratio. MGM Resorts International's cash ratio shows a decline from 4.15 on March 31, 2021, to 0.72 on December 31, 2024, highlighting potential challenges in meeting short-term obligations with liquid assets alone.

In summary, MGM Resorts International's liquidity ratios have experienced fluctuations, with declining trends in recent years, indicating a potential need for the company to manage its short-term liquidity more effectively to ensure financial stability.

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 5.24 5.30 5.53 5.77 5.90 6.17 6.24 6.54 6.92 6.50 6.96 6.68 6.99 7.86 7.77 10.22 9.34 8.00 6.90 5.41

The cash conversion cycle of MGM Resorts International has shown fluctuations over the reporting periods. The cash conversion cycle is a metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2024, MGM Resorts International's cash conversion cycle trended downward initially, indicating an improvement in managing its working capital. The cycle decreased from 5.41 days on March 31, 2020, to 5.24 days on December 31, 2024. This reduction suggests that the company became more efficient in converting its investments into cash during this period.

However, between March 31, 2024, and June 30, 2024, there was a slight increase in the cash conversion cycle from 5.77 days to 5.53 days. This uptick could signify a potential challenge in managing working capital during that specific quarter.

Overall, a decreasing cash conversion cycle generally signifies an improvement in liquidity and efficiency in operations, as the company is quicker in generating cash flow from its operating activities. MGM Resorts International seems to have made progress in this aspect, but occasional fluctuations in the cycle indicate the need for continued monitoring and management of working capital practices.