ProPetro Holding Corp (PUMP)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	3,664	33,354	88,862	111,918	68,772
Short-term investments	US$ in thousands	7,849	7,745	10,283	0	—
Receivables	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	222,266	271,149	284,180	173,785	104,163
Quick ratio		0.05	0.15	0.35	0.64	0.66

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($3,664K + $7,849K + $—K) ÷ $222,266K
= 0.05

The quick ratio, also known as the acid-test ratio, provides insight into a company's short-term liquidity position by measuring its ability to cover immediate liabilities with its most liquid assets. For ProPetro Holding Corp, the quick ratio has been declining over the years.

As of December 31, 2020, the quick ratio stood at 0.66, indicating that the company had $0.66 in liquid assets available for every $1 of current liabilities. This ratio decreased slightly to 0.64 by December 31, 2021, suggesting a marginal weakening in the company's ability to meet its short-term obligations without relying on inventory.

However, a more significant decline was observed by December 31, 2022, as the quick ratio plummeted to 0.35. This substantial reduction may raise concerns about ProPetro's ability to cover its immediate liabilities with its highly liquid assets. By December 31, 2023, the quick ratio further decreased to 0.15, indicating a significant strain on the company's liquidity position.

The most recent data available, as of December 31, 2024, shows a quick ratio of 0.05, emphasizing a drastic deterioration in ProPetro's short-term liquidity position. This low ratio suggests that the company may face challenges in meeting its current obligations with its readily available assets.

Overall, the declining trend in ProPetro's quick ratio over the years indicates a potential liquidity risk and highlights the importance of closely monitoring the company's ability to meet its short-term financial commitments. Researching further into the reasons behind this downward trend and evaluating the company's overall financial health is recommended for a comprehensive analysis of its liquidity position.