Madison Square Garden Sports Corp (MSGS)

The liquidity position of Madison Square Garden Sports Corp, as reflected by the three key ratios—current ratio, quick ratio, and cash ratio—has demonstrated variability over the periods analyzed.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, exhibited a declining trend from 0.50 on June 30, 2021, to a low of 0.29 on June 30, 2023. Subsequently, it experienced a modest recovery to 0.42 by June 30, 2024, and further increased to 0.45 by June 30, 2025. Despite the fluctuations, the ratios remained below the generally accepted threshold of 1.0, indicating that the company's current assets were consistently less than its current liabilities, which may suggest potential liquidity constraints.

The quick ratio, which adjusts the current ratio by excluding inventories to assess immediate liquidity, followed a similar pattern. It increased from 0.32 on June 30, 2021, to 0.38 on June 30, 2022, then decreased sharply to 0.22 by June 30, 2023. The ratio then recovered slightly to 0.31 in 2024 and stabilized around 0.32 in 2025. The ratios below 1.0 reinforce that the company may face challenges in covering short-term liabilities with liquid assets on hand.

The cash ratio, representing the most conservative measure of liquidity by including only cash and cash equivalents, was 0.18 on June 30, 2021, rising modestly to 0.21 in 2022. It experienced a significant decline to 0.08 in 2023 but then increased again to 0.16 in 2024 and further to 0.27 in 2025. The fluctuations highlight periods of liquidity stress, particularly in 2023, when the company's immediate cash resources were least able to cover current liabilities.

In summary, the liquidity ratios for Madison Square Garden Sports Corp over the analyzed period reveal a pattern of overall constrained liquidity, with ratios generally below the critical threshold of 1.0. While there are signs of improvement in recent years, the ratios indicate that the company maintains a relatively tight liquidity position, with potential vulnerability to short-term financial obligations, especially given the sharp decline observed in the cash ratio in 2023.

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Additional liquidity measure

The cash conversion cycle (CCC) of Madison Square Garden Sports Corp has experienced significant variation over the period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the CCC stood at 75.15 days, indicating that, on average, it took approximately 75 days for the company to convert its investments in inventory and receivables into cash, after accounting for its payable deferrals.

Over the subsequent years, there was a marked reduction in the CCC. By June 30, 2022, the cycle shortened substantially to 39.70 days—more than a 47% decrease—suggesting improvements in operational efficiency, receivables collection, or inventory management. The trend of reduction continued, with the cycle reaching 40.91 days by June 30, 2023, maintaining a relatively stable period of efficiency improvements.

The downward trajectory persisted markedly into the next fiscal year, as the CCC contracted further to 22.60 days by June 30, 2024. This indicates the company’s enhanced ability to convert its working capital investments into cash more swiftly, likely through more efficient receivables management, optimized inventory turnover, or extended payment terms with suppliers.

By June 30, 2025, the cash conversion cycle sharply declined to just 3.53 days, reflecting an almost immediate conversion of operational investments into cash. Such a minimal cycle points to highly optimized operational processes, possibly including rapid collection of receivables, minimal inventory holdings, or very favorable payable strategies.

Overall, the progression of Madison Square Garden Sports Corp’s cash conversion cycle demonstrates a consistent and strategic improvement in operational efficiency. The dramatic shortening over the analyzed period signals effective management of working capital components, contributing to a more liquid and agile financial posture.