Par Pacific Holdings Inc (PARR)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 0.18 1.69 1.63 1.28 1.30 1.12 1.07 1.24 1.05 1.01 0.88 0.80 0.83 0.81 0.75 0.82 0.72 0.86 0.89 0.84
Quick ratio 0.18 0.17 0.53 0.54 0.18 0.18 0.11 0.42 0.27 0.24 0.09 0.08 0.08 0.16 0.13 0.36 0.32 0.15 0.18 0.09
Cash ratio 0.18 0.17 0.53 0.54 0.18 0.18 0.11 0.42 0.27 0.24 0.09 0.08 0.08 0.16 0.13 0.36 0.32 0.15 0.18 0.09

Based on the provided data, let's analyze the liquidity ratios of Par Pacific Holdings Inc over the reporting periods:

1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. A current ratio of 1 or higher is generally considered healthy. Par Pacific's current ratio fluctuated over the quarters but showed improvement in recent periods, reaching 1.69 as of September 30, 2024. However, it dropped significantly to 0.18 by December 31, 2024, which may raise concerns about the company's ability to meet its short-term obligations.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. Par Pacific's quick ratio was relatively low in most periods, indicating limited ability to cover immediate liabilities without relying on inventory. Notably, the quick ratio improved to 0.54 by March 31, 2024, suggesting better short-term liquidity position.

3. Cash Ratio: The cash ratio focuses solely on the ability to cover current liabilities with cash and cash equivalents. Par Pacific's cash ratio mirrored the trend of the quick ratio, with fluctuations over time. The company's highest cash ratio was observed on March 31, 2024, at 0.54, indicating an increased ability to pay off immediate obligations with cash reserves.

In conclusion, while Par Pacific Holdings Inc showed some improvement in its liquidity position over the quarters, the company experienced fluctuations in its current, quick, and cash ratios. Management should closely monitor these ratios, especially the significant drop in the current ratio by the end of December 2024, to ensure the company maintains sufficient liquidity to meet its short-term obligations.


Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 52.94 49.50 55.95 52.66 61.86 66.61 73.28 52.89 58.73 55.14 76.87 76.59 65.08 58.13 65.55 77.78 51.65 50.76 36.91 23.14

The cash conversion cycle of Par Pacific Holdings Inc has shown fluctuations over the periods provided. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficient in managing its working capital.

From March 31, 2020, to December 31, 2024, we observe the following trends in the cash conversion cycle:

- The cycle started at 23.14 days in March 2020 and increased steadily to a peak of 77.78 days in March 2021, which may indicate potential challenges in managing inventory and receivables.
- From March 2021 to March 2024, the cycle fluctuated within a range, showing improvements compared to the peak in March 2021 but still exhibiting some volatility.
- The cycle decreased to 49.50 days by September 30, 2024, which was the lowest point observed during this period, possibly indicating better working capital management or operational efficiency.
- By December 31, 2024, the cycle increased slightly to 52.94 days but remained relatively stable compared to previous periods.

Overall, the cash conversion cycle of Par Pacific Holdings Inc has shown variability, with periods of improvement and challenges in managing working capital efficiency. Further analysis of the company's operational performance and financial management practices could provide insights into the factors influencing these fluctuations.