Dropbox Inc (DBX)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.44 | 0.87 | 1.02 | 1.13 | 1.24 | 1.23 | 1.17 | 1.21 | 1.25 | 1.37 | 1.40 | 1.45 | 1.57 | 1.75 | 1.84 | 1.89 | 1.13 | 1.30 | 1.24 | 1.23 |
| Quick ratio | 1.32 | 0.74 | 0.90 | 1.01 | 1.13 | 1.09 | 1.04 | 1.09 | 1.12 | 1.26 | 1.27 | 1.34 | 1.46 | 1.64 | 1.73 | 1.78 | 1.03 | 1.19 | 1.14 | 1.13 |
| Cash ratio | 1.32 | 0.74 | 0.90 | 1.01 | 1.13 | 1.09 | 1.04 | 1.09 | 1.12 | 1.26 | 1.27 | 1.34 | 1.46 | 1.64 | 1.73 | 1.78 | 1.03 | 1.19 | 1.14 | 1.13 |
Dropbox Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations.
The current ratio, measuring the firm's ability to cover its short-term liabilities with its current assets, has shown some fluctuations over the reported periods, ranging from a low of 0.87 on September 30, 2024, to a high of 1.89 on March 31, 2021. Generally, a current ratio above 1 indicates a healthy liquidity position, and Dropbox has maintained a current ratio above this threshold throughout the periods, although there was a slight dip towards the end of the reporting period, falling to 1.02 on June 30, 2024.
The quick ratio, a more stringent measure of liquidity excluding inventories from current assets, paints a slightly different picture. This ratio has also experienced variability but has generally been above 1, except for a few instances. Dropbox's ability to cover its short-term liabilities using its most liquid assets is crucial, and the company has maintained a healthy quick ratio overall, with the lowest being 0.74 on September 30, 2024.
The cash ratio, which focuses solely on cash and cash equivalents to cover current liabilities, mirrors the trends seen in the quick ratio. It peaked at 1.78 on March 31, 2021, demonstrating strong liquidity through available cash reserves. However, like the quick ratio, the cash ratio also saw a decline towards the end of the reporting periods, reaching 0.74 on September 30, 2024.
In conclusion, while Dropbox Inc has generally maintained satisfactory liquidity levels over the reported periods, there are fluctuations observed in the quick and cash ratios towards the end of the reporting period, suggesting potential liquidity challenges that would require careful monitoring and management.
Additional liquidity measure
| 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 conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
The cash conversion cycle for Dropbox Inc has consistently been 0.00 days across all quarters from March 31, 2020, to December 31, 2024. This indicates that the company is able to efficiently manage its working capital, with a short time period between paying suppliers and receiving cash from customers. A cash conversion cycle of zero days suggests that Dropbox is effectively balancing its accounts payable, accounts receivable, and inventory turnover, leading to optimal cash flow management and liquidity. This efficient cycle demonstrates the company's ability to effectively use its resources and generate cash inflows quickly, which is a positive indicator for financial health and operational efficiency.