Madison Square Garden Sports Corp (MSGS)

Based on the liquidity ratios of Madison Square Garden Sports Corp over the past five years, we can observe the following trends:

1. Current Ratio:
The current ratio measures the company's ability to meet its short-term obligations with its current assets. Madison Square Garden Sports Corp's current ratio has been fluctuating over the years, ranging from 0.29 to 0.50. A current ratio below 1 indicates that the company may have difficulty meeting its short-term obligations with its current assets alone. The ratio has shown some improvement from 2023 to 2024, but it still remains relatively low, suggesting potential liquidity challenges.

2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Madison Square Garden Sports Corp's quick ratio has also varied, ranging from 0.15 to 0.40. A quick ratio below 1 typically signals a limited ability to cover short-term liabilities without relying on selling inventory. Similar to the current ratio, the quick ratio has shown some improvement in 2024 but remains at a relatively low level compared to the ideal benchmark of 1 or higher.

3. Cash Ratio:
The cash ratio, the most conservative liquidity ratio, measures the company's ability to cover its short-term liabilities with cash and cash equivalents alone. Madison Square Garden Sports Corp's cash ratio has fluctuated between 0.15 and 0.27 over the past five years. A cash ratio below 1 indicates that the company may not have sufficient liquid assets to cover its short-term obligations. While the cash ratio improved in 2022, it decreased in 2024, suggesting potential challenges in meeting short-term obligations solely with cash.

Overall, based on the liquidity ratios analysis, Madison Square Garden Sports Corp appears to have struggled with maintaining optimal levels of liquidity to meet its short-term obligations consistently over the past five years. Investors and stakeholders may need to closely monitor the company's liquidity position and management's efforts to improve it to ensure financial health and stability.

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Additional liquidity measure

The cash conversion cycle of Madison Square Garden Sports Corp has shown a fluctuating trend over the past five years. In 2024, the company achieved an extremely efficient cash conversion cycle of 0 days, indicating that it was able to convert its investments in inventory and receivables into cash almost instantaneously. This is a significant improvement from the previous year's cycle of 11.23 days.

In contrast, the cash conversion cycle was much longer in 2023 at 31.63 days, suggesting that the company took longer to convert its investments into cash during that period. The cycle further deteriorated in 2022 to 69.12 days, reflecting a prolonged period in which the company's cash was tied up in inventory and receivables.

However, Madison Square Garden Sports Corp managed to reduce the cash conversion cycle significantly in 2021 to 19.72 days, indicating improved efficiency in managing its working capital. This reversal from the previous year's performance demonstrates the company's ability to streamline its operations and convert assets into cash more swiftly.

Overall, examining the trend of the cash conversion cycle over the past five years highlights Madison Square Garden Sports Corp's efforts to optimize its working capital management and enhance cash flow efficiency. Further analysis of the factors influencing these fluctuations in the cash conversion cycle could provide insights into the company's operational effectiveness and financial performance.