CarGurus (CARG)

Cash ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cash and cash equivalents	US$ in thousands	304,193	246,748	218,365	249,128	291,363	355,330	363,060	456,696	469,517	404,429	338,238	315,005	231,944	231,091	184,642	140,668	190,299	245,941	133,199	74,451
Short-term investments	US$ in thousands	0	0	0	0	20,724	91,824	90,490	—	0	0	30,000	60,000	90,000	90,000	85,000	100,000	100,000	0	43,000	81,281
Total current liabilities	US$ in thousands	93,051	110,588	112,041	116,319	115,178	108,638	110,764	123,999	98,733	148,881	175,973	148,907	170,709	102,450	103,547	81,725	66,536	55,867	43,147	58,331
Cash ratio		3.27	2.23	1.95	2.14	2.71	4.12	4.09	3.68	4.76	2.72	2.09	2.52	1.89	3.13	2.60	2.94	4.36	4.40	4.08	2.67

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($304,193K + $0K) ÷ $93,051K
= 3.27

The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. It is calculated by dividing the total cash and cash equivalents by the current liabilities.

Analyzing CarGurus' cash ratio over the past few quarters, we observe fluctuations in the ratio. As of December 31, 2024, CarGurus had a cash ratio of 3.27, indicating the company had enough cash and cash equivalents to cover 3.27 times of its current liabilities. This suggests the company had a strong liquidity position at the end of 2024.

However, the cash ratio has shown variability over the quarters, with some periods showing higher ratios (e.g., September 30, 2022 - 2.72; June 30, 2023 - 4.09) and others lower (e.g., December 31, 2021 - 1.89; June 30, 2022 - 2.09). The fluctuation in the cash ratio may be attributed to changes in the company's cash position and current liabilities.

Overall, a higher cash ratio indicates a better liquidity position, while a lower ratio may suggest potential liquidity challenges. It is important for investors and stakeholders to track the trend of the cash ratio over time to understand CarGurus' ability to meet its short-term obligations using its available cash resources.