EchoStar Corporation (SATS)

EchoStar Corporation's liquidity ratios have shown a significant decrease over the past five years. The current ratio decreased from 5.72 in 2019 to 0.61 in 2023, indicating a decline in the company's ability to cover its short-term obligations with its current assets. Similarly, the quick ratio dropped from 5.43 in 2019 to 0.44 in 2023, reflecting a decrease in the company's ability to meet its immediate liabilities with its most liquid assets.

The cash ratio also declined significantly from 5.03 in 2019 to 0.30 in 2023, indicating a reduction in EchoStar's capacity to cover its current liabilities with its cash and cash equivalents alone. Overall, the downward trend in these liquidity ratios suggests potential liquidity challenges for EchoStar Corporation, as the company may face difficulties in meeting its short-term financial obligations with its current asset base.

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Additional liquidity measure

The cash conversion cycle of EchoStar Corporation has shown some variability over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

In 2023, the cash conversion cycle was 24.35 days, indicating that EchoStar took approximately 24 days to convert its investments in inventory and other resources into cash from sales. This is a positive sign as a lower cash conversion cycle implies a shorter time for the company to recover its cash outflows.

In 2022, the company had a negative cash conversion cycle of -115.69 days, which is unusual and could suggest that EchoStar was able to collect cash from customers before paying suppliers for inventory. While a negative cycle can be beneficial in the short term, it may not be sustainable in the long run.

In 2021, the cash conversion cycle increased to 34.18 days, indicating a longer time for the company to convert investments into cash. This could imply challenges in managing inventory levels, payment terms with suppliers, or collections from customers.

In 2020 and 2019, the cash conversion cycle was 28.65 days and 24.13 days, respectively, showing a relatively stable trend compared to the fluctuations observed in other years.

Overall, EchoStar Corporation should aim to keep its cash conversion cycle at an optimal level to ensure efficiency in managing its working capital and cash flows, which are crucial for the company's financial health and operations. Monitoring and improving this metric can help the company maintain a healthy balance between cash inflows and outflows.