Patterson-UTI Energy Inc (PTEN)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.41 | 1.51 | 1.34 | 1.75 | 1.58 |
| Quick ratio | 1.13 | 1.28 | 1.09 | 1.42 | 1.30 |
| Cash ratio | 0.18 | 0.25 | 0.27 | 0.82 | 0.43 |
Patterson-UTI Energy Inc's liquidity ratios show fluctuations over the past five years. The current ratio has been generally above 1, indicating that the company has had sufficient current assets to cover its current liabilities. However, the ratio declined from 1.75 in 2020 to 1.41 in 2023, suggesting a potential decrease in the company's ability to meet short-term obligations.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also demonstrates a declining trend from 1.63 in 2020 to 1.24 in 2023. This indicates that the company may be relying more on inventory to meet its short-term obligations, which could pose a risk if inventory cannot be easily converted to cash.
The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, has shown a significant decrease from 1.02 in 2020 to 0.29 in 2023. This indicates a potential reduction in the company's ability to cover its short-term liabilities with cash on hand alone.
Overall, Patterson-UTI Energy Inc's liquidity ratios suggest a weakening liquidity position over the past few years, raising concerns about its short-term financial health and ability to meet upcoming obligations. Management may need to closely monitor and actively manage liquidity to ensure the company's financial stability.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -319.65 | -443.52 | -272.54 | 15.50 | -212.81 |
Patterson-UTI Energy Inc's cash conversion cycle measures the average number of days it takes for the company to convert its investments in resources into cash from sales. From 2019 to 2023, the trend in the cash conversion cycle reflects fluctuations but with an overall increasing trend, except for a decrease in 2020 compared to 2019.
The company's cash conversion cycle was 41.24 days in 2023, slightly lower than the previous year's 41.57 days. This suggests that the company took slightly less time to convert its investments to cash in 2023. However, the cycle remains longer than in 2020 when it was 25.55 days, indicating a slower conversion of investments into cash in recent years.
The cash conversion cycle of Patterson-UTI Energy Inc was 43.87 days in 2021, which was higher compared to 2020 but improved to 41.57 days in 2022 before slightly decreasing further in 2023.
Overall, while there have been fluctuations in the cash conversion cycle, the trend indicates a longer time taken for the company to convert its investments into cash in recent years, which can impact liquidity and operational efficiency.