Sun Country Airlines Holdings Inc (SNCY)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|
| Current ratio | 0.63 | 0.65 | 0.92 | 1.33 |
| Quick ratio | 0.53 | 0.54 | 0.81 | 1.23 |
| Cash ratio | 0.44 | 0.45 | 0.72 | 1.12 |
Sun Country Airlines Holdings Inc's liquidity ratios have shown a decline over the years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, decreased from 1.33 in 2021 to 0.63 in 2024. This indicates a weakening ability to meet its current liabilities using current assets alone.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also decreased from 1.23 in 2021 to 0.53 in 2024. This downward trend suggests that the company may struggle to meet its short-term obligations without relying on the sale of inventory.
Furthermore, the cash ratio, which represents the firm's ability to settle immediate obligations with its cash and cash equivalents, declined from 1.12 in 2021 to 0.44 in 2024. This indicates a decreasing ability to cover its current liabilities solely with cash on hand.
Overall, the declining trend in Sun Country Airlines Holdings Inc's liquidity ratios raises concerns about its ability to meet its short-term financial obligations without facing potential liquidity challenges in the future.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|
| Cash conversion cycle | days | -12.19 | -14.33 | -17.11 | -12.19 |
The cash conversion cycle of Sun Country Airlines Holdings Inc has been exhibiting a negative trend over the past four years based on the provided data. This indicates that the company is efficiently managing its working capital and cash flows from operations.
In December 31, 2021, the cash conversion cycle was -12.19 days, improving to -17.11 days by December 31, 2022. Although there was a slight increase to -14.33 days on December 31, 2023, the cycle decreased again to -12.19 days by December 31, 2024.
A negative cash conversion cycle suggests that Sun Country Airlines Holdings Inc is able to convert its inventory, accounts receivable, and accounts payable into cash at a faster rate. This may be a sign of effective inventory management, prompt collection of receivables, and delayed payment of payables.
Overall, the company's cash conversion cycle data indicates efficient working capital management and a favorable liquidity position.