ProPetro Holding Corp (PUMP)

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 1.31 1.20 1.11 1.18 1.15 1.28 1.26 1.21 1.16 1.18 1.34 1.46 1.44 1.27 1.38 1.37 1.61 1.63 1.89 1.61
Quick ratio 0.26 0.21 0.25 0.18 0.15 0.23 0.25 0.17 0.35 0.20 0.36 0.41 0.64 0.44 0.46 0.43 0.66 0.56 0.63 0.64
Cash ratio 0.26 0.21 0.25 0.18 0.15 0.23 0.25 0.17 0.35 0.20 0.36 0.41 0.64 0.44 0.46 0.43 0.66 0.56 0.63 0.64

ProPetro Holding Corp's liquidity ratios indicate its ability to meet its short-term obligations. The current ratio has fluctuated over the years but generally remained above 1, reflecting that the company has had sufficient current assets to cover its current liabilities. However, the current ratio decreased slightly towards the end of 2024, possibly signaling a tighter liquidity position.

In terms of the quick ratio, which excludes inventory from current assets, the trend shows a decline from 2021 to 2023, suggesting that the company may have had challenges meeting its short-term obligations without relying on inventory. The quick ratio improved slightly in 2024, but it remained below 1, indicating a potential liquidity risk.

The cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, also showed a declining trend, hitting its lowest point in December 2023. This indicates that ProPetro Holding Corp may have faced cash shortages in meeting its immediate payment obligations during 2022 and 2023.

Overall, ProPetro Holding Corp's liquidity ratios demonstrate mixed performance, with the current ratio generally above 1, but the quick ratio and cash ratio showing more concerning trends. Further analysis and monitoring of the company's liquidity position are recommended to ensure financial stability and sustain its operations effectively in the future.

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 4.62 4.67 5.13 5.22 4.83 4.49 5.52 5.88 1.82 1.51 1.38 0.97 1.81 1.75 1.50 1.54 1.34 0.72 0.83 0.58

The cash conversion cycle of ProPetro Holding Corp has shown some fluctuations over the periods analyzed. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is able to quickly recoup its investments.

From March 31, 2020, to December 31, 2022, ProPetro Holding Corp maintained a relatively stable cash conversion cycle, ranging between 0.58 days to 1.82 days. This suggests efficient management of inventory and cash flow during this period.

However, starting from March 31, 2023, the cash conversion cycle increased significantly to 5.88 days and continued to remain elevated through December 31, 2024, fluctuating between 4.49 days to 5.22 days. This extended cash conversion cycle could indicate potential challenges in converting investments into cash, which may be attributed to issues such as slower sales turnover, increased inventory holding periods, or delayed payment collections.

Overall, while ProPetro Holding Corp previously demonstrated efficiency in managing its cash conversion cycle, the recent increase in the cycle duration highlights the importance of closely monitoring working capital management practices to ensure optimal cash flow performance.