Dropbox Inc (DBX)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.44 | 1.26 | 1.25 | 1.57 | 1.13 |
| Quick ratio | 1.32 | 1.13 | 1.12 | 1.46 | 1.03 |
| Cash ratio | 1.32 | 1.13 | 1.12 | 1.46 | 1.03 |
Dropbox Inc's liquidity ratios have shown a generally positive trend over the years.
1. Current Ratio: The current ratio indicates the company's ability to cover its short-term obligations with its current assets. The ratio has increased from 1.13 in 2020 to 1.44 in 2024, suggesting that the company has improved its liquidity position over time. A current ratio above 1 indicates that Dropbox can meet its short-term liabilities using its current assets.
2. Quick Ratio: The quick ratio provides a more stringent measure of liquidity by excluding inventory from current assets. Similar to the current ratio, the quick ratio has shown an upward trend from 1.03 in 2020 to 1.32 in 2024. This indicates that Dropbox has a sufficient level of liquid assets to cover its immediate liabilities without relying on inventory.
3. Cash Ratio: The cash ratio focuses specifically on the company's ability to cover its short-term liabilities using only cash and cash equivalents. The cash ratio has also increased steadily from 1.03 in 2020 to 1.32 in 2024, indicating that Dropbox holds a healthy amount of cash reserves relative to its short-term obligations.
Overall, the improving trend in Dropbox Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, suggests that the company has been managing its short-term liquidity effectively and is in a strong position to meet its financial commitments.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Dropbox Inc's cash conversion cycle has consistently been 0.00 days from December 31, 2020, to December 31, 2024. This indicates that the company is efficiently managing its working capital and the time it takes to convert its investments in inventory and other resources into cash from sales. A shorter cash conversion cycle suggests that Dropbox Inc is able to quickly convert its resources into cash, which may indicate effective inventory and accounts receivable management. Overall, a stable and low cash conversion cycle reflects positively on the company's operational efficiency and financial health.