Oceaneering International Inc (OII)

The current ratio for Oceaneering International Inc has shown a general upward trend from March 2020 to December 2021, indicating a satisfactory ability to meet short-term obligations with current assets. However, starting from March 2022, there has been a gradual decline in the current ratio, reaching its lowest point by December 2024. This may suggest potential challenges in covering current liabilities in the more recent periods.

Similarly, the quick ratio, which provides a more stringent measure of liquidity excluding inventory, has followed a similar pattern, showing improvement up to December 2021 but then declining steadily. The quick ratio has decreased more sharply compared to the current ratio, suggesting a potential issue with the company's ability to meet immediate obligations without relying on inventory.

The cash ratio, which indicates the ability to cover current liabilities with cash and cash equivalents, has fluctuated over the years. While there were periods of strength, particularly in December 2021, the cash ratio has shown a decreasing trend from March 2022 to December 2024, indicating a reduction in the company's ability to settle short-term obligations solely with cash assets.

Overall, the declining trend in all three liquidity ratios from 2022 to 2024 raises concerns about Oceaneering International Inc's short-term financial position and ability to meet its current liabilities without facing liquidity challenges. It may be advisable for the company to closely monitor and manage its liquidity position to ensure financial stability in the upcoming periods.

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Additional liquidity measure

The cash conversion cycle measures the time it takes for a company to convert its resources and investments in inventory into cash inflows from sales. Looking at the data provided for Oceaneering International Inc, we can observe fluctuations in the cash conversion cycle over time.

From March 31, 2020, to December 31, 2024, Oceaneering's cash conversion cycle experienced some variability, ranging from a high of 77.37 days in June 2020 to a low of 48.57 days in December 2024. Generally, a lower cash conversion cycle is preferable as it implies that the company is more efficient in managing its working capital and converting inventory into cash.

Over the period under review, Oceaneering's cash conversion cycle trended downwards in the latter part of 2021 and throughout 2022, reaching its lowest point in December 2022. This downward trend indicates that the company was able to improve its efficiency in managing working capital and generating cash from its operations during this period.

However, there was a slight uptick in the cash conversion cycle in the first half of 2023, before stabilizing around the 60-70 days range towards the end of 2024. This increase may suggest potential challenges in managing working capital efficiency or fluctuations in sales and inventory levels.

In conclusion, Oceaneering International Inc showed variability in its cash conversion cycle over the period analyzed, with some improvement in efficiency during 2022 but slight fluctuations in subsequent periods. It would be important for the company to consistently monitor and manage its working capital effectively to maintain a low cash conversion cycle and improve its overall liquidity position.