Booking Holdings Inc (BKNG)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.28 | 1.86 | 2.10 | 3.56 | 1.83 |
| Quick ratio | 1.18 | 1.71 | 2.00 | 3.34 | 1.60 |
| Cash ratio | 0.95 | 1.46 | 1.79 | 3.23 | 1.36 |
Booking Holdings Inc's liquidity ratios have shown some fluctuations over the past five years. The current ratio, which indicates the company's ability to cover its short-term liabilities with its current assets, decreased significantly from 3.56 in 2020 to 1.28 in 2023. This suggests a potential decrease in the company's liquidity position over the years.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also decreased from 3.56 in 2020 to 1.28 in 2023. This implies that the company may have fewer liquid assets available to cover its short-term obligations without relying on inventory.
The cash ratio, which focuses solely on cash and cash equivalents compared to current liabilities, also saw a decline over the years, from 3.41 in 2020 to 1.03 in 2023. This indicates a reduction in Booking Holdings Inc's ability to cover its short-term liabilities with cash on hand alone.
Overall, the decreasing trend in all three liquidity ratios suggests that Booking Holdings Inc's ability to meet its short-term obligations may have weakened in recent years. It would be advisable for the company to closely monitor its liquidity position and implement strategies to enhance its short-term financial stability.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -52.42 | -30.15 | -16.58 | -2.60 | -98.15 |
The cash conversion cycle of Booking Holdings Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle increased to 55.57 days from 47.61 days in 2022, indicating that the company took longer to convert its investments in inventory and other resources back into cash during the year. This may suggest potential challenges in managing working capital efficiently or potential delays in collecting receivables.
Comparing to 2021 and 2020 where the cash conversion cycle was 45.23 days and 28.41 days respectively, the increase in 2023 indicates a reversal in the previous trend of improvement in efficiency. However, the cycle in 2023 is still lower than in 2019, where it was 40.70 days, indicating that the company's working capital management in 2023 was less efficient than in 2019.
Overall, the increasing trend in the cash conversion cycle from 2020 to 2023 suggests potential issues in a company's ability to manage its cash flow and working capital effectively. Booking Holdings Inc should focus on strategies to optimize its cash conversion cycle to ensure that it can efficiently convert its investments into cash to sustain its operations and growth.