Akamai Technologies Inc (AKAM)

Based on the provided data, let's analyze the liquidity ratios of Akamai Technologies Inc over the five-year period.

1. Current Ratio:
- The current ratio measures the company's ability to cover short-term obligations with its current assets.
- Akamai's current ratio has slightly decreased from 2.54 in 2020 to 1.23 in 2024.
- A current ratio above 1 indicates that the company has more current assets than current liabilities, suggesting a healthy liquidity position.
- While the ratio has decreased over the years, the company still maintains a current ratio above 1, indicating that it can meet its short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets.
- Akamai's quick ratio has also shown a decreasing trend from 3.30 in 2020 to 1.62 in 2024.
- A quick ratio above 1 indicates that the company can meet its short-term obligations without relying on selling inventory.
- Despite the declining trend, the company's quick ratio remains above 1, suggesting that it still has an acceptable level of liquidity.

3. Cash Ratio:
- The cash ratio is the most conservative measure of liquidity as it only considers cash and cash equivalents to cover current liabilities.
- Akamai's cash ratio has decreased from 2.43 in 2020 to 1.27 in 2024.
- A cash ratio above 1 indicates that the company has enough cash to cover its current liabilities.
- The decreasing trend in the cash ratio may indicate a lower ability to cover short-term obligations solely with cash and cash equivalents.

In summary, while Akamai Technologies Inc's liquidity ratios have exhibited a general decreasing trend over the five-year period, the company still maintains ratios above 1 for all three measures, indicating that it possesses sufficient liquidity to meet its short-term obligations. However, the decreasing trend warrants further monitoring to ensure that the company's liquidity remains adequate in the future.

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Additional liquidity measure

The cash conversion cycle of Akamai Technologies Inc has shown fluctuations over the past five years. Starting at 38.25 days on December 31, 2020, it increased to 40.73 days by December 31, 2021. However, there was a significant decrease to 29.91 days by December 31, 2022, indicating an improvement in the efficiency of the company's cash management. The cycle increased slightly to 33.60 days by December 31, 2023, and then further to 36.65 days by December 31, 2024. Overall, the trend suggests that Akamai Technologies Inc has been managing its cash conversion cycle effectively, with some fluctuations observed over the years.