PBF Energy Inc (PBF)

Based on the provided data, we can see a declining trend in PBF Energy Inc's liquidity ratios over the years.

1. Current Ratio:
The current ratio measures the company's ability to meet its short-term obligations with its current assets. PBF Energy's current ratio decreased from 1.58 in 2020 to 1.25 in 2024. Although the ratio fluctuated over the years, it generally remained above 1, indicating that the company has more current assets than current liabilities. However, the decreasing trend raises concerns about the company's short-term liquidity position.

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. PBF Energy's quick ratio ranged from 0.47 in 2024 to 0.87 in 2020. The decreasing trend in the quick ratio indicates that the company may have difficulty meeting its immediate obligations without relying on inventory, which may be less liquid.

3. Cash Ratio:
The cash ratio focuses solely on the most liquid assets, cash and cash equivalents, to assess the company's ability to cover its short-term liabilities. PBF Energy's cash ratio dropped from 0.66 in 2020 to 0.15 in 2024. This significant decline suggests that the company has less cash on hand relative to its short-term obligations, indicating a potential liquidity strain.

In conclusion, the declining trend in PBF Energy Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, raises concerns about the company's ability to meet its short-term financial obligations and maintain adequate liquidity in the coming years.

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Additional liquidity measure

The cash conversion cycle for PBF Energy Inc has shown some fluctuations over the years based on the provided data. As of December 31, 2020, the company had a cash conversion cycle of 40.11 days, which decreased slightly to 39.32 days by December 31, 2021. Subsequently, there was a significant improvement in efficiency as the cash conversion cycle decreased substantially to 27.96 days by December 31, 2022.

However, by December 31, 2023, the cash conversion cycle had increased to 35.60 days before declining again to 33.11 days by December 31, 2024. Overall, the trend indicates that PBF Energy Inc has been actively managing its cash conversion cycle, with varying levels of efficiency in converting its investments in inventory and accounts receivable into cash.

It is important for the company to continue monitoring and optimizing its cash conversion cycle to ensure effective working capital management and financial stability. Further analysis and comparison with industry benchmarks can provide additional insights into the company's operational efficiency and effectiveness in managing its cash flow.