Permian Resources Corporation (PR)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.52 | 0.77 | 0.52 | 0.50 | 0.47 |
| Quick ratio | 0.44 | 0.54 | 0.48 | 0.46 | 0.44 |
| Cash ratio | 0.06 | 0.10 | 0.06 | 0.04 | 0.04 |
Permian Resources Corp's liquidity ratios have fluctuated over the past five years.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some variability but remained below 1 in all years, indicating potential issues with short-term liquidity. The ratio has ranged from a low of 0.47 in 2019 to a high of 0.77 in 2022, with the latest value at 0.52.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has mirrored the trends of the current ratio. The quick ratio has also been consistently below 1, ranging from 0.47 in 2019 to 0.77 in 2022, matching the current ratio's values.
The cash ratio, which is the most restrictive liquidity measure as it only considers cash and cash equivalents, has shown a decreasing trend over the years. The ratio was the highest in 2022 at 0.30 and dropped to 0.14 in 2023, signaling a potential decrease in the company's ability to cover its short-term obligations with its cash resources alone.
Overall, Permian Resources Corp's liquidity ratios, especially the current and quick ratios, suggest that the company may face challenges in meeting its short-term financial obligations with its current asset base. Investors and creditors may closely monitor these ratios to assess the company's liquidity position and financial health.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -59.52 | 123.01 | 6.64 | 31.31 | -19.61 |
The cash conversion cycle of Permian Resources Corp has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 56.26 days from 48.44 days in 2022. This indicates that it took the company longer to convert its investments in inventory and other resources into cash in 2023.
Comparing to previous years, the cash conversion cycle was notably higher in 2021 at 25.27 days, showing a significant improvement in efficiency in converting investments into cash. In 2020 and 2019, the cash conversion cycle was 34.31 days and 39.39 days respectively, indicating a moderate efficiency in this aspect.
Overall, it is important for Permian Resources Corp to closely monitor its cash conversion cycle to ensure effective management of its working capital and optimize its cash flow operations. fluctuations in the cash conversion cycle can indicate variations in the company's ability to manage its cash resources efficiently.