ANGI Homeservices Inc (ANGI)

The liquidity ratios of ANGI Homeservices Inc. over the period from December 31, 2020, to December 31, 2024, exhibit notable trends indicative of the company's evolving liquidity position.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, was at a high of 4.18 at the end of 2020. This ratio experienced a decline over the subsequent years, reaching 2.11 in 2021 and dropping further to 1.72 at the end of 2022. Slight improvements were observed in 2023 and 2024, with ratios rising to 1.88 and 2.14, respectively. Despite these fluctuations, the current ratio remained above 1.7 throughout the period, signifying that current assets generally sufficed to cover current liabilities.

The quick ratio, which excludes inventory from current assets to provide a more stringent measure of liquidity, followed a similar downward trend from 3.88 in 2020 to 1.85 in 2021, and then to 1.40 in 2022. In 2023 and 2024, the quick ratio increased slightly to 1.61 and 1.96, respectively. These figures indicate that, although liquidity slightly diminished initially, the company maintained a comfortable buffer to settle immediate liabilities without relying on inventory sales.

The cash ratio, reflecting the most conservative liquidity measure based solely on cash and cash equivalents, was 3.69 in 2020. It declined to 1.55 in 2021 and further to 1.14 in 2022. The ratio showed recovery thereafter, rising to 1.41 in 2023 and reaching 1.80 in 2024. These movements suggest that while cash reserves decreased from 2020 to 2022, the company improved its cash position in the subsequent years, strengthening its ability to cover short-term obligations with cash alone.

Overall, the analysis indicates that ANGI Homeservices Inc. experienced a relative decline in liquidity ratios from 2020 through 2022, reflecting a potential reduction in liquid assets relative to current liabilities. The subsequent increases from 2022 onward suggest efforts to bolster liquidity, thereby improving the company's capacity to meet short-term liabilities. Despite fluctuations, the ratios consistently remained above critical thresholds, indicating a generally stable liquidity profile throughout this period.

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Additional liquidity measure

The cash conversion cycle (CCC) for ANGI Homeservices Inc over the analyzed period indicates a consistent negative value, reflecting the company's tendency to receive cash from customers prior to or concurrent with the outflow for supplier payments.

On December 31, 2020, the CCC was recorded at -54.16 days, which suggests that the company was able to collect receivables and settle payables roughly 54 days before the corresponding cash disbursements, indicating a robust position in managing working capital and cash flow timing. This negative cycle deepened considerably by December 31, 2021, with the CCC narrowing to -25.25 days, implying an improvement or a shorter cash conversion period, potentially due to faster collection or managed payables. The trend continued into December 31, 2022, with the CCC reaching -11.44 days, approaching a near-neutral position but still maintaining a positive cash flow advantage.

However, a significant change emerged by December 31, 2023, when the CCC sharply increased to -158.23 days. This dramatic elongation indicates that the company was able to receive cash notably earlier relative to its payables, possibly due to extended payment terms with suppliers, accelerated collection efforts, or a combination of both. The substantial negative value emphasizes an extended period during which the company holds cash before settling its liabilities, enhancing liquidity but also potentially reflecting shifts in operational or payment policies.

In 2024, the CCC improved relative to 2023 but remained negative at -104.83 days. While still indicating that the company generally collects cash before paying suppliers, this reduction suggests some moderation in the previous period's extreme cash flow timing advantage, possibly due to changes in trade terms or operational adjustments.

Overall, the analysis of ANGI Homeservices Inc’s cash conversion cycle over these years reveals a trend towards increasingly negative cycles, culminating in a pronounced peak in 2023. This pattern signifies strong cash flow timing management, with the company consistently receiving cash ahead of its payments, though the degree of this advantage has fluctuated markedly. Such fluctuations may impact liquidity management strategies and warrant continued monitoring to understand underlying operational and contractual dynamics.