RPC Inc (RES)
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 | 4.03 | 5.04 | 4.61 | 4.75 | 4.79 | 4.90 | 5.46 | 4.54 | 3.94 | 3.30 | 3.37 | 3.71 | 3.76 | 3.79 | 4.64 | 4.34 | 5.38 | 4.61 | 6.96 | 4.06 |
| Quick ratio | 1.79 | 2.06 | 1.73 | 1.41 | 1.47 | 1.23 | 0.73 | 1.12 | 0.71 | 0.18 | 0.45 | 0.53 | 0.63 | 0.67 | 1.26 | 0.82 | 1.06 | 1.56 | 2.47 | 0.70 |
| Cash ratio | 1.79 | 2.06 | 1.73 | 1.41 | 1.47 | 1.23 | 0.73 | 1.12 | 0.71 | 0.18 | 0.45 | 0.53 | 0.63 | 0.67 | 1.26 | 0.82 | 1.06 | 1.56 | 2.47 | 0.70 |
Based on the provided data, RPC Inc's liquidity ratios exhibit fluctuations over the period analyzed.
1. Current Ratio: The current ratio measures the company's short-term liquidity and ability to cover its current liabilities with its current assets. RPC Inc's current ratio ranged from a high of 6.96 on June 30, 2020, to a low of 3.30 on September 30, 2022. Generally, a current ratio above 1 indicates that a company can meet its short-term obligations. The trend in RPC Inc's current ratio shows some volatility but generally stayed above 3, indicating a healthy liquidity position.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. RPC Inc's quick ratio ranged from a low of 0.18 on September 30, 2022, to a high of 2.47 on June 30, 2020. A quick ratio above 1 suggests that the company can meet its short-term obligations without relying on selling inventory. RPC Inc's quick ratio fluctuated significantly, indicating potential challenges in meeting immediate obligations at certain points in time.
3. Cash Ratio: The cash ratio is the most conservative liquidity measure, considering only cash and cash equivalents to cover current liabilities. RPC Inc's cash ratio saw similar fluctuations to the quick ratio, ranging from 0.18 on September 30, 2022, to 2.06 on September 30, 2024. A cash ratio above 1 indicates the company can cover its current liabilities with cash alone. RPC Inc's cash ratio fluctuated, suggesting varying levels of liquidity adequacy over the period.
Overall, RPC Inc's liquidity ratios demonstrate a mix of strengths and weaknesses in terms of short-term liquidity management. The company generally maintained current ratios above 3, indicating a solid ability to meet its short-term obligations. However, the significant fluctuations in quick and cash ratios suggest potential challenges in managing liquidity at times. Monitoring these ratios closely can help assess the company's ability to meet its short-term financial obligations effectively.
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 | 34.64 | 34.73 | 35.16 | 34.89 | 33.80 | 32.90 | 29.64 | 28.14 | 30.26 | 32.16 | 35.84 | 38.49 | 39.17 | 44.70 | 50.83 | 56.38 | 52.52 | 46.94 | 42.19 | 34.93 |
The cash conversion cycle of RPC Inc has shown fluctuation over the recorded periods. It started at 34.93 days on March 31, 2020, increased to 56.38 days by March 31, 2021, then gradually decreased to 34.64 days by December 31, 2024. The cash conversion cycle measures 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 indicates that the company is able to efficiently manage its working capital and convert its resources into cash quickly. On the other hand, a longer cash conversion cycle suggests that the company may have inefficiencies in managing its inventory, receivables, and payables, leading to a slower cash conversion process.
Overall, the trend of decreasing cash conversion cycle for RPC Inc from March 31, 2020 to December 31, 2024 indicates an improvement in the company's working capital management efficiency and potential enhancement in cash flow generation capability over the period. However, it is important for the company to continue monitoring and optimizing its cash conversion cycle to ensure optimal financial performance in the future.