RPC Inc (RES)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 4.03 | 4.79 | 3.94 | 3.76 | 5.38 |
| Quick ratio | 1.79 | 1.47 | 0.71 | 0.63 | 1.06 |
| Cash ratio | 1.79 | 1.47 | 0.71 | 0.63 | 1.06 |
RPC Inc's current ratio has shown a decreasing trend over the past five years, declining from 5.38 in 2020 to 4.03 in 2024. This indicates a reduction in the company's ability to cover its short-term liabilities with its current assets. However, the current ratio remains above 1, suggesting that RPC Inc still has sufficient current assets to meet its short-term obligations.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also decreased over the same period from 1.06 in 2020 to 1.79 in 2024. This trend indicates a potential improvement in RPC Inc's ability to meet its short-term liabilities using only its most liquid assets.
The cash ratio, which focuses exclusively on cash and cash equivalents to cover short-term liabilities, has followed a similar trend to the quick ratio, increasing from 1.06 in 2020 to 1.79 in 2024. This indicates that RPC Inc has been able to enhance its liquidity position by increasing its cash reserves relative to its short-term obligations.
In summary, despite a decline in the current ratio, RPC Inc has maintained a relatively strong liquidity position over the years, supported by improvements in its quick ratio and cash ratio. The company seems to have enhanced its ability to meet short-term obligations with more liquid assets, which could indicate better financial health and risk management.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 37.90 | 33.80 | 30.26 | 39.17 | 52.52 |
The cash conversion cycle of RPC Inc has shown a decreasing trend over the past five years. In December 2020, the company had a cash conversion cycle of 52.52 days, which decreased to 39.17 days by December 2021. This trend continued with further reductions to 30.26 days by December 2022 and 33.80 days by December 2023. However, there was a slight increase to 37.90 days by December 2024.
Overall, RPC Inc has been able to manage its cash conversion cycle efficiently, indicating improvement in its ability to convert its investments in inventory and receivables into cash. The decreasing trend suggests the company has been able to optimize its working capital management and streamline its operations, although the slight increase in 2024 may warrant further investigation to ensure sustained efficiency in cash conversion.