Paramount Global Class B (PARA)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.32 | 1.23 | 1.76 | 1.66 | 1.32 |
| Quick ratio | 0.99 | 0.92 | 1.40 | 1.21 | 0.87 |
| Cash ratio | 0.25 | 0.26 | 0.66 | 0.36 | 0.07 |
Paramount Global's liquidity ratios provide insight into the company's ability to meet short-term obligations and cover immediate financial needs. Looking at the trend over the past five years, the current ratio has fluctuated, indicating changes in the company's ability to pay its current liabilities with its current assets.
The current ratio stood at 1.32 in 2023, showing an improvement from the previous year but slightly lower than the level in 2021. This suggests that the company has $1.32 in current assets for every $1 in current liabilities, indicating a reasonable liquidity position.
The quick ratio, which excludes inventory from current assets, has also shown variability over the years. At 1.17 in 2023, the company appears to have $1.17 in liquid assets available to cover each dollar of current liabilities, signaling a relatively healthy position.
The cash ratio, which is the most conservative liquidity measure, reflects the company's ability to meet current liabilities with its most liquid assets, cash, and cash equivalents. Paramount Global's cash ratio has improved each year, reaching 0.43 in 2023. This indicates that the company has $0.43 in cash for every dollar of current liabilities, enhancing its ability to meet short-term obligations.
In summary, Paramount Global's liquidity ratios suggest a generally stable and satisfactory liquidity position over the past five years. The company has demonstrated an ability to cover its short-term obligations, with improvements seen in the cash ratio specifically. However, it is important to continue monitoring these ratios to ensure continued liquidity strength and financial stability.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 94.46 | 92.10 | 102.33 | 125.79 | 130.33 |
The cash conversion cycle for Paramount Global has shown some fluctuations over the past five years. The cycle ranged from 87.58 days to 101.29 days during this period. It indicates the average time taken by the company to convert its investment in inventory and other resources into cash received from sales. A lower cash conversion cycle is generally preferred as it indicates that the company is able to efficiently manage its working capital and convert its inventory into cash quickly. Conversely, a higher cash conversion cycle may suggest inefficiencies in managing inventory, accounts receivable, and accounts payable. Paramount Global should aim to continually assess and improve its operating efficiency to reduce its cash conversion cycle further in order to enhance its liquidity and financial performance.