Pursuit Attractions and Hospitality, Inc. (PRSU)

The liquidity ratios of Pursuit Attractions and Hospitality, Inc. over the specified periods demonstrate notable fluctuations and trends.

The current ratio, which measures the company’s ability to cover short-term liabilities with its current assets, began below the generally accepted benchmark of 1.0 at 0.93 as of December 31, 2020. It subsequently increased to 1.13 in both 2021 and 2022, indicating an improved liquidity position and a stronger capacity to meet short-term obligations. However, by December 31, 2023, the current ratio slightly declined to 1.01, approaching the minimal threshold for liquidity adequacy. A significant increase was observed in 2024, with the ratio reaching 1.54, suggesting an enhanced liquidity stance and a more comfortable position to cover current liabilities.

The quick ratio, which refines liquidity measurement by excluding inventories and other less liquid current assets, followed a similar trend. It increased from 0.59 in 2020 to 0.89 and 0.86 in 2021 and 2022 respectively, indicating progressively better liquidity, though remaining below 1.0, which reflects some reliance on inventory or less liquid assets for meeting immediate obligations. A substantial decline occurred in 2023, with the quick ratio falling sharply to 0.16, signaling a potential liquidity concern or a significant reduction in easily accessible current assets. Nevertheless, by 2024, the quick ratio rebounded to 0.89, nearly reaching previous higher levels, thus indicating a recovery in the company's ability to meet short-term liabilities without depending heavily on inventory.

The cash ratio, a more conservative measure of liquidity assessing only cash and cash equivalents, began at 0.40 in 2020 and slightly decreased to 0.35 in 2021 and 0.28 in 2022. This indicates that cash holdings were relatively limited compared to current liabilities during that period. A sharp decline to 0.12 occurred in 2023, reflecting a further decrease in cash holdings and heightened liquidity risk. However, in 2024, the cash ratio increased notably to 0.65, signaling improved liquidity from more substantial cash reserves relative to short-term liabilities.

Overall, the liquidity profile exhibits periods of strengthening and weakening. The initial years favored gradual improvement, while 2023 posed a notable liquidity challenge, particularly in the quick and cash ratios. The resurgence in 2024 suggests efforts to bolster liquidity positions, with cumulatively improved ratios indicating a more robust ability to meet short-term financial obligations moving forward.

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Additional liquidity measure

The analysis of Pursuit Attractions and Hospitality, Inc.'s cash conversion cycle (CCC) over the period from December 31, 2020, to December 31, 2024, reveals significant fluctuations in the efficiency of the company's working capital management.

In 2020, the company's CCC stood at 7.52 days, indicating a relatively short cycle and efficient management of receivables, inventory, and payables at that time. This suggests that the company was able to convert its investments in inventory and receivables into cash fairly quickly, with minimal duration of net holding periods.

By 2021, the CCC increased noticeably to 27.31 days, reflecting a deterioration in the cycle. This may have been driven by longer receivable collection periods, extended inventory holdings, or delayed payments to suppliers, signaling a need for improved working capital management during that period.

The situation further worsened in 2022, with the CCC rising sharply to 67.08 days. Such an expansion indicates that the company's efficiency significantly declined, potentially due to increased inventory levels, slower receivables collection, or delayed payables. This extended cycle could have impacted liquidity and cash flow, emphasizing the need for strategic management improvements.

In 2023, the CCC drastically decreased to 2.78 days, denoting a substantial turnaround towards operational efficiency. This reduction suggests that the company managed to accelerate receivables collections, reduce inventory holding periods, or expedite payables, thereby improving cash flow and liquidity.

However, in 2024, the CCC slightly increased to 4.00 days, indicating a minor shift from the previous year. While still maintaining an overall short cycle, this increase could imply slight adjustments in operational processes or strategic changes in working capital management.

Overall, the trend demonstrates that Pursuit Attractions and Hospitality, Inc. experienced a period of operational inefficiency in 2022, followed by a significant recovery in 2023. The fluctuation underscores the importance of continuous working capital management and strategies aimed at optimizing each components of the cash conversion cycle to maintain overall financial health.