ANGI Homeservices Inc (ANGI)

The liquidity ratios of ANGI Homeservices Inc. over the specified periods reflect notable trends and variations in the company's short-term financial health.

Current Ratio:
From June 2020 to March 2025, the current ratio exhibits a general decline followed by a steady recovery. Initially, the ratio stood at 2.09 in June 2020, peaking at 4.18 in December 2020. Subsequently, there was a significant downward trend, reaching a low of approximately 1.67 in June 2022. Post this period, the ratio gradually increased, reaching approximately 2.15 in March 2025. The current ratio indicates that, historically, the company's ability to cover its current liabilities with its current assets was strongest in late 2020, followed by a period of vulnerability, and then a return to a more comfortable liquidity position by early 2025. The stabilization and slight upward trend in recent periods suggest efforts to strengthen liquidity or a reduction in short-term liabilities relative to current assets.

Quick Ratio:
The quick ratio, which excludes less liquid current assets such as inventory, followed a similar pattern. It was highest in December 2020 at 3.88, signifying a robust liquidity position excluding inventory. After this peak, the ratio declined significantly, bottoming around 1.42 in June 2022, indicating a more conservative liquidity position, but still above 1, which generally signifies that liquid assets are sufficient to cover current obligations without relying on inventory sales. From mid-2022 onward, the quick ratio has somewhat stabilized, trending upward to approximately 1.98 by March 2025, highlighting improved short-term liquidity excluding inventory.

Cash Ratio:
The cash ratio, which measures the company's ability to cover current liabilities with its most liquid assets (cash and cash equivalents), also followed the pattern of initial high levels, with a peak of 3.69 in December 2020. This indicates that at that time, the company held substantial cash reserves relative to current liabilities. After this peak, the ratio declined, reaching approximately 1.07 in June 2022, but demonstrated a consistent upward trajectory thereafter, reaching nearly 1.79 in March 2025. This trend suggests that while the company's cash holdings relative to liabilities decreased during the initial period post-2020, it has since been accumulating more liquid assets, thereby improving its capacity for immediate liquidity.

Overall Observation:
Across all three liquidity ratios, a pattern of initial strengthening in late 2020 followed by a period of volatility or moderation is evident. The ratios then show signs of recovery and stabilization, particularly in the last two years, with the current, quick, and cash ratios all trending upward. This indicates an enhancement in the company's liquidity profile in recent periods, reflecting either improved cash management, a reduction in short-term liabilities, or an increase in liquid assets, positioning ANGI Homeservices Inc. to better meet its short-term obligations.

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Additional liquidity measure

The analysis of ANGI Homeservices Inc.'s cash conversion cycle (CCC) over the specified period reveals a predominantly negative value, indicative of a company that effectively manages its receivables and payables to generate significant cash flow before the sale is finalized. The CCC has demonstrated substantial fluctuations from June 30, 2020, through March 31, 2025.

Initially, on June 30, 2020, the CCC stood at approximately -149.74 days, signifying that the company experienced a strong cash inflow prior to completing sales, which is characteristic of efficient working capital management or a business model that benefits from early cash collection or extended payment terms. Over the subsequent periods, the CCC improved markedly, reaching less negative levels, such as -11.57 days as of June 30, 2022, which suggests a period where the company's cash conversion efficiency was relatively less advantageous, potentially due to changes in operational practices or market conditions.

However, beginning in the latter half of 2022 through 2023, the CCC turned markedly more negative, reaching a peak of -167.09 days by March 2025. This trend indicates an increasingly accelerated cash flow cycle, with the company collecting cash significantly earlier relative to inventory and receivables, or delaying payments to suppliers. Such a shift may reflect strategic changes, such as tighter credit policies, improved collections processes, or extended supplier terms.

Throughout the period, the cyclical pattern shows periods of both improvement and deterioration. The cyclical nature might correspond to seasonal business activities, strategic initiatives, or macroeconomic factors influencing operation cycles and working capital management.

In summary, ANGI Homeservices Inc. has maintained a predominantly negative cash conversion cycle throughout the analyzed timeframe, with periods of substantial improvement followed by deterioration. The overall trend toward more negative values in recent periods suggests enhanced cash flow efficiency, but also underscores the importance of continued effective receivables and payables management to sustain such efficiency.