Paramount Global Class B (PARA)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 1.30 1.32 1.23 1.76 1.66
Quick ratio 0.28 0.25 0.26 0.66 0.36
Cash ratio 0.28 0.25 0.26 0.66 0.36

The liquidity ratios of Paramount Global Class B provide insights into the company's ability to meet its short-term financial obligations.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. Paramount Global Class B has shown a fluctuating trend in its current ratio over the years, starting at 1.66 in 2020 and peaking at 1.76 in 2021 before declining in the subsequent years to 1.23 in 2022, 1.32 in 2023, and 1.30 in 2024. While the current ratio remains above 1 in all years, indicating the company's ability to meet its short-term obligations, the downward trend suggests a potential decrease in liquidity in recent years.

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. Paramount Global Class B's quick ratio has also displayed variability, starting at a low of 0.36 in 2020, increasing to 0.66 in 2021, and then decreasing in subsequent years to 0.26 in 2022, 0.25 in 2023, and 0.28 in 2024. The declining trend in the quick ratio indicates a potential weakening ability to cover immediate liabilities with the most liquid assets.

3. Cash Ratio: The cash ratio specifically assesses the company's ability to cover its current liabilities with cash and cash equivalents. Paramount Global Class B's cash ratio mirrors the trend seen in the quick ratio, starting at 0.36 in 2020, rising to 0.66 in 2021, and then declining to 0.26 in 2022, 0.25 in 2023, and 0.28 in 2024. The decreasing cash ratio over the years further emphasizes a possible liquidity strain in recent periods.

In summary, while Paramount Global Class B's liquidity ratios indicate a general ability to meet short-term obligations, the declining trends in the current, quick, and cash ratios suggest a potential decrease in liquidity and the company's need to closely monitor its short-term financial position and manage its liquidity effectively.


See also:

Paramount Global Class B Liquidity Ratios


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days 26.83 23.05 24.68 30.94 42.78

The cash conversion cycle of Paramount Global Class B has shown a consistent improvement over the years, decreasing from 42.78 days at the end of 2020 to 26.83 days by the end of 2024. This indicates that the company has been able to more efficiently convert its investments in inventory and accounts receivable into cash during the specified period. A declining cash conversion cycle is generally considered positive, as it suggests that the company is managing its working capital effectively and operating more efficiently in terms of cash flow management.