Royal Gold Inc (RGLD)

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 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Current ratio 3.23 2.34 1.09 2.50 2.31 2.31 2.62 3.44 2.92 2.82 5.32 5.22 3.85 5.71 7.12 7.88 8.37 8.31 3.02 3.09
Quick ratio 2.31 1.60 0.65 1.83 1.48 1.65 1.84 2.34 1.91 2.13 4.50 3.80 2.73 4.42 6.14 6.84 7.44 7.38 2.11 2.04
Cash ratio 2.30 1.48 0.61 1.79 1.44 1.45 1.68 2.31 1.86 1.90 4.38 3.71 2.66 4.34 5.91 6.68 7.36 7.33 1.88 1.82

Royal Gold Inc's liquidity ratios have shown fluctuations over the years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 1, indicating a healthy liquidity position. However, there was a significant decline in the current ratio from the peak of 8.37 on September 30, 2020, to 1.09 on June 30, 2024, before recovering slightly to 3.23 on December 31, 2024.

The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, tells a similar story. The quick ratio was above 1 for most periods, with a notable decrease from 7.44 on September 30, 2020, to 0.65 on June 30, 2024, before improving to 2.31 on December 31, 2024.

The cash ratio, which is the most conservative liquidity ratio focusing only on cash and cash equivalents, also displayed a decreasing trend over the years. There was a sharp decline from 7.36 on September 30, 2020, to 0.61 on June 30, 2024, before rebounding to 2.30 on December 31, 2024.

While Royal Gold Inc generally maintained acceptable levels of liquidity, the declines in these ratios towards the latter periods indicate potential challenges in managing short-term obligations and highlight the importance of closely monitoring the company's liquidity position.

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 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Cash conversion cycle days 6.88 1.18 -3.19 1.42 -3.02 11.69 11.35 10.94 18.17 26.76 21.29 8.89 21.77 36.40 40.10 39.52 47.16 30.83 30.72 37.97

The cash conversion cycle of Royal Gold Inc has exhibited fluctuations over the periods analyzed.

From December 31, 2019, to March 31, 2020, there was a decrease in the number of days it took for the company to convert its investments in inventory into cash receipts from sales, indicating improved efficiency. This trend continued into June 30, 2020. However, by September 30, 2020, there was an increase in the days in the cycle, suggesting a potential delay in cash conversion.

The trend continued to fluctuate throughout the subsequent periods, with improvements seen in some quarters and deteriorations in others. Notably, by December 31, 2023, the cash conversion cycle turned negative, indicating that the company was able to convert its investments in inventory to cash receipts faster than the time it took for payables to become due. This suggests a more efficient use of working capital during that period.

In the most recent period as of December 31, 2024, the cash conversion cycle increased again. This trend should be monitored to assess if it represents a temporary fluctuation or requires operational adjustments to improve working capital management.

Overall, fluctuations in the cash conversion cycle can be influenced by various factors such as inventory management, accounts receivable collection policies, and payment terms with suppliers. It is important for Royal Gold Inc to monitor and potentially improve its cash conversion cycle to enhance liquidity and operational efficiency.