DoorDash, Inc. Class A Common Stock (DASH)

The liquidity ratios of DoorDash, Inc. Class A Common Stock from September 2020 through March 2025 reflect notable shifts in the company's short-term financial health and ability to cover its obligations using liquid assets.

Starting with the current ratio, which assesses the company's capacity to meet short-term liabilities with its total current assets, there is a discernible decline over the period. The ratio peaked at 4.59 in March 2021, indicating a strong liquidity position where current assets were nearly four and a half times current liabilities. Since then, it gradually decreased, reaching approximately 1.64 as of December 2023, and slightly increasing to 1.72 in March 2025. This downward trend suggests a diminishing buffer for covering short-term liabilities solely with current assets, indicating a potential tightening of liquidity but remaining above the commonly accepted threshold of 1.0, which suggests the company generally maintains sufficient current assets relative to current liabilities.

The quick ratio, which excludes inventory and focuses on the most liquid assets such as receivables and cash, shows a similar downward trend. Initially robust at 4.35 in March 2021, it systematically declined to around 1.35 in December 2023 and exhibits a slight increase to approximately 1.44 by March 2025. Although these ratios have decreased significantly from their peaks, they still remain above 1.0, indicating that the company retains a reasonable level of liquid assets to satisfy urgent liabilities.

The cash ratio, a more conservative measure indicating the ability to settle short-term obligations immediately with cash and cash equivalents, also reveals a declining trajectory. It was highest at 4.09 in March 2021 and decreased to roughly 1.20 by the end of 2023, then exhibits a slight upward movement to about 1.27 in March 2025. This indicates that although the company's immediate liquidity position has diminished since early 2021, it continues to hold sufficient cash equivalents to meet current liabilities without needing to liquidate other assets.

In summary, DoorDash's liquidity ratios from September 2020 through March 2025 exhibit a consistent decline from elevated levels, reflecting a reduction in liquidity cushion over this period. However, all three measures—current, quick, and cash ratios—remain above the threshold of 1.0, suggesting that the company continues to maintain adequate short-term liquidity to meet its immediate and short-term obligations despite a decreasing trend.

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See also:

DoorDash, Inc. Class A Common Stock Liquidity Ratios (Quarterly Data)

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Additional liquidity measure

Analyzing the cash conversion cycle (CCC) of DoorDash, Inc. Class A Common Stock over the specified period reveals notable fluctuations and trends.

Between September 2020 and December 2020, the CCC decreased from 19.42 days to 15.46 days, indicating an improvement in cash flow efficiency, likely due to shorter periods tied up in inventory, receivables, or payables. This trend continued into March 2021, reaching a low of 12.82 days, further suggesting increased operational efficiency.

The most significant reduction occurred throughout 2021, with the cycle diminishing to near zero or turning negative in March 2022 (-6.95 days) and June 2022 (-3.99 days). Negative CCC values imply that the cash inflows from customers are effectively received before cash outflows for payments to suppliers or service providers are due, highlighting exceptional operational or financing strategies, or a shift in payables and receivables management.

However, starting in December 2022, there is a pronounced reversal with the CCC rising sharply to 51.07 days. This indicates a substantial increase in the time it takes for the company to convert its investments in inventory and receivables into cash, which could be associated with changes in business operations, market conditions, or credit terms. Subsequently, the cycle fluctuates but remains positive, with values around 27 to 38 days in 2023, suggesting a longer cash conversion period compared to the earlier years.

In 2024, the trend shows a reduction back toward minimal levels, with the CCC decreasing from 36.24 days in March 2024 to 8.83 days by December 2024. This indicates a significant improvement in cash management and operational efficiency, with the cycle stabilizing at more typical, shorter durations. The forecasted data for March 2025 shows an even shorter cycle at 4.87 days, further reinforcing the trend toward efficient cash flow management.

Overall, the period encapsulates a transition from highly efficient, even negative, cash conversion cycles around early 2022—likely reflecting favorable supply chain, receivables, and payables practices—to a period of increased cycle times in late 2022 and 2023, before returning to improved efficiency in late 2024 and beyond. This pattern may reflect strategic adjustments, operational scaling, or external market influences impacting DoorDash's working capital management.