Nexstar Broadcasting Group Inc (NXST)

The current ratio of Nexstar Broadcasting Group Inc has shown a slight improvement over the years, increasing from 1.66 in 2020 to 1.79 in 2021 and further to 1.81 in 2022. However, there was a decrease to 1.53 in 2023, before recovering slightly to 1.66 in 2024. This indicates the company's ability to cover its short-term obligations with its current assets has fluctuated during the period.

In contrast, the quick ratio, which excludes inventory from current assets, paints a different picture. The quick ratio was relatively strong in 2020 at 2.03 but then dramatically dropped to 0.24 in 2021 and remained low at 0.23 in both 2022 and 2023. However, there was a marginal improvement to 0.18 in 2024. This suggests that Nexstar Broadcasting Group Inc may have difficulty meeting its short-term liabilities with its most liquid assets.

The cash ratio, which is a more stringent measure of liquidity, mirrored the trend of the quick ratio in this case. Starting at 2.03 in 2020, the cash ratio also significantly decreased to 0.24 in 2021 and stayed at 0.23 in 2022 and 2023, albeit slightly increasing to 0.18 in 2024. This implies that the company may have limited ability to meet its current obligations using only its cash and cash equivalents.

Overall, while the current ratio indicates a relatively stable liquidity position for Nexstar Broadcasting Group Inc over the years, the quick ratio and cash ratio highlight potential challenges in meeting short-term obligations with available liquid assets, as evidenced by the significant drop in these ratios in 2021 that persisted through 2023. Further monitoring of these ratios and potential action to improve liquidity management may be warranted to ensure the company's financial health in the future.

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Additional liquidity measure

The cash conversion cycle of Nexstar Broadcasting Group Inc has shown a consistent trend of efficient cash management, maintaining a cycle of 0.00 days for the fiscal years ending December 31, 2020, 2021, and 2023. This suggests that the company effectively turns its investments in inventory into cash without delays in receiving payments from customers or paying its suppliers.

However, there was a slight increase in the cash conversion cycle to 2.84 days as of December 31, 2022. This may indicate a temporary slowdown in the conversion of inventory and receivables into cash, which could be due to various factors such as changes in customer payment terms or inventory management practices.

Overall, Nexstar Broadcasting Group Inc has demonstrated a strong ability to efficiently manage its working capital and convert its assets into cash, which is a positive indicator of its financial health and operational efficiency. Further monitoring of the cash conversion cycle will be essential to ensure continued effectiveness in cash management.