Duolingo Inc (DUOL)

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
Cash and cash equivalents	US$ in thousands	785,791	854,409	888,240	829,713	747,610	701,737	678,665	641,091	608,180	599,967	591,160	577,331	553,922	549,440	114,636	117,459	120,490
Short-term investments	US$ in thousands	91,854	26,354	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	422,231	342,133	317,724	303,722	277,362	234,934	217,106	202,813	181,766	155,630	147,326	135,775	119,131	98,645	85,051	84,078	65,690
Cash ratio		2.08	2.57	2.80	2.73	2.70	2.99	3.13	3.16	3.35	3.86	4.01	4.25	4.65	5.57	1.35	1.40	1.83

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($785,791K + $91,854K) ÷ $422,231K
= 2.08

Duolingo Inc's cash ratio, which measures the company's ability to cover its short-term liabilities with cash and cash equivalents, has shown a general declining trend from December 2020 to December 2024. The cash ratio stood at 1.83 as of December 2020 and gradually decreased to 2.08 by December 2024.

The relatively higher cash ratios in 2021 (ranging from 1.35 to 5.57) indicate that the company had a strong ability to cover its short-term obligations with cash during that period. However, the decreasing trend in the cash ratio over subsequent periods may signify a declining liquidity position or a shift in the company's cash management strategy.

It is essential for investors and stakeholders to closely monitor Duolingo Inc's cash ratio to ensure that the company maintains a healthy level of liquidity to meet its short-term financial obligations effectively.