Akamai Technologies Inc (AKAM)

Akamai Technologies Inc's liquidity ratios have shown a general trend of decreasing over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has decreased from 3.22 in 2019 to 2.16 in 2023. This suggests that the company may have slightly less capacity to meet its short-term liabilities compared to previous years.

The quick ratio, which is a more stringent liquidity measure that excludes inventory from current assets, also follows the same trend as the current ratio. It has decreased from 3.22 in 2019 to 2.16 in 2023, indicating a potential decrease in the company's ability to cover its short-term obligations with its most liquid assets.

The cash ratio, a more conservative measure of liquidity that only considers cash and cash equivalents to current liabilities, has similarly decreased from 2.42 in 2019 to 1.29 in 2023. This indicates a decline in the company's ability to settle its short-term liabilities solely with its cash reserves.

Overall, while Akamai Technologies Inc's liquidity ratios have decreased over the past five years, the company still maintains a relatively strong liquidity position with current, quick, and cash ratios above 1.0 in each year. However, the declining trend warrants further monitoring to ensure that the company can continue to meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Akamai Technologies Inc has fluctuated over the past five years. The company's cash conversion cycle represents the time it takes for Akamai to convert its investments in inventory and other resources into cash inflows from sales.

In 2023, the cash conversion cycle increased to 33.86 days from 30.19 days in 2022. This implies that Akamai took slightly longer to convert its investments in inventory and receivables into cash during 2023 compared to the previous year. However, it is important to note that the increase was not significant.

In 2021, there was a notable increase in the cash conversion cycle to 39.66 days from 37.13 days in 2020, showing a delay in converting investments into cash during that period. On the other hand, in 2019, the company had a relatively shorter cash conversion cycle of 18.27 days, indicating that Akamai was able to efficiently convert its investments into cash during that year.

Overall, the varying cash conversion cycle figures for Akamai Technologies Inc suggest fluctuations in the company's efficiency in managing its working capital and converting investments into cash. The company should aim to optimize its cash conversion cycle to ensure timely cash inflows from its operations and maintain a healthy financial position.