Paramount Skydance Corporation Class B Common Stock (PSKY)

The liquidity ratios of Paramount Skydance Corporation Class B Common Stock over the specified period indicate varying degrees of short-term financial health.

The current ratio, which measures a company's ability to cover its current liabilities with its current assets, showed an initial increase from 1.66 in December 2020 to a peak of 1.76 in 2021. However, it subsequently declined to 1.23 by the end of 2022, indicating a reduction in the firm's liquidity buffer. There was a modest recovery to 1.32 in 2023, and it slightly decreased again to 1.30 in 2024. Overall, the trend signifies a narrowing margin of current assets relative to current liabilities, with the ratio remaining above 1.0 throughout the period, suggesting the company maintained the ability to meet short-term obligations but with decreasing cushion.

The quick ratio, which excludes inventory and other less liquid assets from current assets, followed a similar pattern. It increased from 1.21 in 2020 to 1.40 in 2021, signifying improved liquidity. This was followed by a notable decline to 0.92 in 2022, falling below the critical threshold of 1.0, which implies potential difficulty in covering current liabilities without relying on inventory sales. The ratio then stabilized near 1.0 in 2023 and 2024, at 0.99, indicating the company regained some liquidity but continued to operate with a relatively tight margin.

The cash ratio, representing the most conservative measure of liquidity by assessing only cash and cash equivalents against current liabilities, displayed an increase from 0.36 in 2020 to 0.66 in 2021, reflecting significant improvement in immediate liquidity. However, it declined sharply to 0.26 in 2022 and remained low at 0.25 in 2023, with a slight increase to 0.28 in 2024. This illustrates that, over the period, the company’s capacity to settle short-term liabilities with cash alone was limited and relatively stable at low levels, indicating a dependence on other current assets for liquidity.

In summary, the company's liquidity positions suggest a trend of initial improvement, followed by a notable decline, particularly in the quick and cash ratios. While the current ratio remained above 1.0, indicating ongoing ability to meet short-term obligations, the narrowing margins, especially in the quick and cash ratios, highlight potential liquidity stress and reliance on existing current assets, which warrants close monitoring in future periods.

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Additional liquidity measure

The cash conversion cycle (CCC) of Paramount Skydance Corporation Class B Common Stock demonstrates a trend of initial decline followed by a slight increase over the observed period from December 31, 2020, to December 31, 2024. Specifically, the data indicate that the CCC decreased from 130.17 days in 2020 to a low of 88.60 days in 2022. This reduction suggests an improvement in the company's operational efficiency during this period, potentially reflecting shorter inventory turnover periods, faster receivables collection, or extended payables relative to receivables and inventory days.

Following this decline, the CCC experienced a modest increase in the subsequent years, reaching 92.70 days in 2023 and slightly rising further to 94.91 days in 2024. This uptick could imply a slight deterioration in working capital management, perhaps due to extended receivable days, inventory holding periods, or a change in payables strategy.

Overall, the trend illustrates that from 2020 to 2022, the company's cash conversion cycle notably improved, indicating more efficient cash flow management. However, the marginal increase observed after 2022 suggests a stabilization or potential slight decline in operational agility. This nuanced pattern underscores the importance of ongoing monitoring to assess whether the company can sustain or further enhance its cash conversion efficiency in the future.