Patterson-UTI Energy Inc (PTEN)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.54 | 1.52 | 1.50 | 1.48 | 1.41 | 1.37 | 1.76 | 1.60 | 1.51 | 1.55 | 1.39 | 1.35 | 1.34 | 1.60 | 1.73 | 1.79 | 1.75 | 2.02 | 1.90 | 1.65 |
| Quick ratio | 1.22 | 1.18 | 1.15 | 1.58 | 1.13 | 1.07 | 1.44 | 1.34 | 1.28 | 1.28 | 1.10 | 1.08 | 1.09 | 1.34 | 1.41 | 1.45 | 1.42 | 1.67 | 1.52 | 1.35 |
| Cash ratio | 0.29 | 0.13 | 0.09 | 0.60 | 0.18 | 0.06 | 0.33 | 0.32 | 0.25 | 0.09 | 0.04 | 0.12 | 0.27 | 0.56 | 0.74 | 0.79 | 0.82 | 1.15 | 0.91 | 0.43 |
The liquidity ratios of Patterson-UTI Energy Inc, based on the provided data, show trends in its ability to meet short-term obligations and its overall liquidity position:
1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. Patterson-UTI Energy Inc's current ratio fluctuated over the analyzed periods but generally stayed above 1, indicating that the company had more current assets than current liabilities during most periods. It peaked at 2.02 in September 2020 but experienced a decline in recent periods, standing at 1.54 at the end of December 2024.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. Patterson-UTI Energy Inc's quick ratio followed a similar trend to the current ratio, generally staying above 1 during the periods analyzed. However, it dropped below 1 in some quarters, such as December 2021 and September 2023, indicating potential challenges in meeting immediate obligations without relying on inventory liquidation.
3. Cash Ratio: The cash ratio focuses solely on the company's ability to cover its short-term liabilities with its cash and cash equivalents. Patterson-UTI Energy Inc's cash ratio varied significantly over the analyzed periods, ranging from 0.04 to 1.15. The ratio showed a declining trend overall, with lower values in recent periods like September 2023 and June 2024, suggesting a reduced capacity to cover short-term obligations solely with cash holdings.
In summary, while Patterson-UTI Energy Inc generally maintained adequate liquidity levels to meet short-term obligations during the analyzed periods, the declining trends in the quick ratio and cash ratio indicate potential challenges in managing immediate liquidity needs. It would be essential for the company to closely monitor its liquidity position to ensure its ability to meet financial obligations efficiently.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -111.97 | -157.10 | -182.35 | -269.13 | -321.67 | -500.83 | -418.35 | -560.60 | -443.24 | -417.44 | -400.67 | -307.93 | -272.51 | -325.57 | -194.88 | -131.57 | 14.63 | 8.27 | 9.97 | -13.20 |
Patterson-UTI Energy Inc's cash conversion cycle has displayed significant fluctuations over the periods provided. The company exhibited a negative cash conversion cycle, indicating efficient management of its working capital during the analysis period. Specifically, the cycle saw a rapid improvement from a negative 13.20 days on March 31, 2020, to a negative 560.60 days on March 31, 2023, and subsequently decreased to a negative 111.97 days by December 31, 2024.
A negative cash conversion cycle suggests that Patterson-UTI Energy Inc is able to convert its investments in inventory and accounts receivable into cash faster than it pays its liabilities. This efficiency could be due to effective inventory management, prompt collection of receivables, and possibly negotiated longer payment terms with suppliers.
Overall, the trend of a consistently negative cash conversion cycle indicates that the company is effectively managing its working capital, which may contribute to improved liquidity and financial performance.