Madison Square Garden Sports Corp (MSGS)

Madison Square Garden Sports Corp's liquidity ratios over the recent periods indicate a relatively modest capacity to meet short-term obligations, with some fluctuations observed across the analyzed timeframe.

The current ratio, which measures the company's ability to cover current liabilities with current assets, has generally remained below 1.0 throughout the period, reflecting a liquidity position that is somewhat constrained. Starting at 0.31 on September 30, 2020, it increased consistently to reach a peak of 0.58 on March 31, 2022, before experiencing a decline to 0.29 on June 30, 2023. Since then, it has shown slight improvement, reaching 0.52 by March 31, 2025. The persistently low levels suggest that the company's current assets are often insufficient to fully cover its current liabilities, which could imply reliance on non-current assets or other measures to manage short-term liabilities.

The quick ratio, which excludes inventory and provides a more stringent test of liquidity, follows a similar pattern. It remains below 0.5 during most periods, indicating limited liquidity of liquid assets relative to current liabilities. Notably, the quick ratio peaked at 0.47 on March 31, 2022, but recently declined to about 0.21 on September 30, 2023, before slightly recovering to 0.43 by March 31, 2025. This low and fluctuating trend signals that the company's ability to quickly meet short-term obligations without liquidating inventory is limited.

The cash ratio, representing the most conservative liquidity measure by focusing solely on cash and cash equivalents, has generally been below 0.2. The highest observed value was 0.27 on June 30, 2025, while the lowest was 0.07 on December 31, 2023. Throughout the period, the cash ratio remains comparatively low, emphasizing limited immediate cash resources relative to current liabilities. The recent trend indicates a slight improvement, with the ratio reaching 0.27 on June 30, 2025.

Overall, Madison Square Garden Sports Corp exhibits a pattern of consistently low liquidity ratios, indicating that the company's ability to meet short-term liabilities solely with liquid or near-liquid assets is somewhat constrained. This may reflect strategic management choices, industry characteristics, or financial strategies that involve leveraging non-current assets or future revenue streams to sustain operations. However, the trend toward gradual improvement in some ratios suggests a potential strengthening of liquidity position if these patterns continue.

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Additional liquidity measure

The analysis of Madison Square Garden Sports Corp’s cash conversion cycle (CCC) over the period from September 30, 2020, through June 30, 2025, reveals notable fluctuations and underlying trends.

In September 2020, the CCC stood at approximately 28.77 days, indicating a relatively efficient cycle with quick turnover of receivables and payables. This efficiency markedly changed by December 2020, when the cycle extended significantly to 88.63 days, reflecting possible operational disruptions or strategic shifts impacting receivables collection, inventory management, or payables.

The first half of 2021 experienced further fluctuations, with the cycle reaching an extensive 188.87 days in March 2021, which suggests a substantial slowdown in receivables collection, delayed payables, or increased inventory holding. This peak coincides with the period of the COVID-19 pandemic's impact, which likely contributed to extended cash conversion timelines due to reduced revenues and operational constraints.

Subsequently, from June 2021 onwards, the CCC displayed a declining trend, with notable improvement by September 2021 to 114.87 days. The subsequent quarters generally show a stabilization of the cycle within the range of approximately 64.95 to 89.00 days, indicating an adjustment period as operational efficiencies were restored.

A significant reduction is observed by June 2022, when the CCC decreased sharply to 39.70 days, reflecting enhanced operational efficiencies or favorable changes in receivables and payables management. The cycle remained relatively stable through December 2022 and into the first half of 2023, with values generally ranging from around 52 to 71 days.

From late 2023 onwards, further variability appears. The cycle increased to 80.82 days at year-end 2023, then declined again to 58.45 days by March 2024. Notably, by June 2024, the CCC improved to a very low level of approximately 22.61 days, indicating a period of optimized cash management. However, the cycle fluctuated subsequently, reaching about 74.58 days in September 2024, before dropping sharply again to 30.46 days at the end of December 2024. The first half of 2025 shows a rise to 53.88 days, followed by a minimal value of 3.52 days in June 2025, signifying highly efficient cash cycle management.

Overall, the data illustrate periods of significant inefficiency, likely linked to external shocks such as the pandemic, followed by sustained periods of operational improvement. The recent trend towards shorter CCC periods demonstrates efforts towards cash flow optimization, with notable fluctuations reflecting changing operational conditions, strategic adjustments, and possibly varying industry influences over the analyzed period.