Tidewater Inc (TDW)

Tidewater Inc's liquidity ratios have shown some fluctuations over the years. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has ranged from 1.80 to 2.17. While the current ratio decreased slightly from 2.17 in 2021 to 1.94 in 2022 and further to 1.80 in 2023, it improved in 2024 to 2.11, indicating that the company's short-term liquidity position strengthened.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Tidewater Inc's quick ratio fluctuated between 0.82 and 0.98 over the period, with a similar pattern to the current ratio. The ratio improved in 2024 to 0.98, suggesting a better ability to meet short-term obligations without relying on inventory.

Furthermore, the cash ratio, which specifically assesses the company's ability to cover current liabilities with cash and cash equivalents, mirrored the trends of the quick ratio. Tidewater Inc's cash ratio ranged from 0.82 to 0.98, indicating a fluctuating but generally stable position in terms of cash liquidity.

Overall, the liquidity ratios of Tidewater Inc appear to have exhibited some variability but generally point to a reasonable ability to meet its short-term obligations using its current assets, with an improvement in liquidity noted in the most recent year. It is important for the company to continue monitoring and managing its liquidity position to ensure financial stability and support future growth opportunities.

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Additional liquidity measure

The cash conversion cycle (CCC) measures how long it takes for a company to convert its investments in inventory and other resources into cash received from sales. For Tidewater Inc, the CCC has fluctuated over the years based on the provided data:

- In 2020, the CCC was 14.90 days, indicating that it took the company approximately 14.90 days to convert its investments into cash from sales.
- By the end of 2021, the CCC improved to 12.15 days, suggesting a more efficient conversion of resources into cash.
- However, in 2022, the CCC increased significantly to 21.70 days, signifying a potential slowdown in converting investments into cash.
- The CCC decreased to 15.73 days by the end of 2023, showing some improvement in the efficiency of the cash conversion process.
- In 2024, the CCC further improved to 13.33 days, indicating that Tidewater Inc was able to convert its investments into cash at a quicker pace.

Overall, the cash conversion cycle trend of Tidewater Inc shows variability, with fluctuations in the time taken to convert investments into cash from sales. It is essential for the company to monitor and manage its CCC effectively to ensure efficient working capital management and liquidity.