Penn National Gaming Inc (PENN)

Liquidity ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.11 1.42 1.41 1.38 1.74 1.79 1.90 1.88 1.96 2.82 2.66 2.48 2.42 2.37 1.99 1.56 0.71 0.72 0.71 0.78
Quick ratio 0.94 1.26 1.29 1.25 1.63 1.66 1.76 1.76 1.89 2.84 2.69 2.50 2.43 2.37 1.72 1.05 0.63 0.60 0.56 0.63
Cash ratio 0.73 1.06 1.05 1.04 1.42 1.52 1.60 1.65 1.72 2.70 2.54 2.36 2.32 2.15 1.56 0.92 0.53 0.50 0.44 0.49

PENN Entertainment Inc's liquidity ratios have exhibited some fluctuations over the past eight quarters. The current ratio, which measures the company's ability to cover short-term obligations with current assets, has shown a declining trend from Q4 2022 to Q4 2023, indicating a potential decrease in the company's short-term liquidity position. Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a decreasing trend over the same period.

On the other hand, the cash ratio, which focuses solely on the company's ability to cover short-term liabilities with available cash and cash equivalents, has displayed fluctuations but generally remained above 1.0, suggesting a healthy cash position relative to short-term obligations. However, the cash ratio has decreased from Q4 2022 to Q4 2023, indicating a potential decrease in the company's immediate cash availability to cover short-term liabilities.

Overall, while PENN Entertainment Inc's liquidity ratios have shown some variability, it is crucial for the company to closely monitor its liquidity position, especially in terms of its current assets' ability to cover short-term liabilities and maintain sufficient cash reserves to meet immediate obligations. Actions may need to be taken to ensure adequate liquidity levels to support ongoing operations and financial stability.

Additional liquidity measure

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 47.03 8.32 12.83 12.64 8.54 21.95 28.33 25.15 28.17 26.95 24.98 33.88 21.84 16.14 17.09 -6.19 15.81 16.40 25.10 26.75

To analyze PENN Entertainment Inc's cash conversion cycle, we observe fluctuations in the number of days taken to convert resources invested in the operational cycle back into cash. The cash conversion cycle increased from 4.79 days in Q3 2022 to 14.96 days in Q4 2023, indicating a gradual slowdown in the conversion of inventory and receivables to cash. This trend suggests a potential inefficiency in managing working capital, leading to a longer cash turnover period.

Throughout the analyzed periods, PENN Entertainment Inc experienced varying cash conversion cycle durations, with Q2 and Q4 of 2023 exhibiting relatively longer cycles compared to previous quarters. The company may consider implementing strategies to expedite the conversion process, such as optimizing inventory management, enhancing accounts receivable collection, and streamlining payables.

The shortest cash conversion cycle was recorded in Q1 2022 at 2.29 days, indicating efficient working capital management during that period. Understanding and addressing the factors contributing to fluctuations in the cash conversion cycle can help PENN Entertainment Inc improve liquidity, strengthen financial performance, and sustain operational efficiency.