Duolingo Inc (DUOL)

Current 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
Total current assets	US$ in thousands	1,101,590	1,058,440	1,041,560	977,278	897,798	772,981	784,941	741,234	697,183	668,331	655,150	640,635	619,271	596,344	162,568	158,994	158,380
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
Current ratio		2.61	3.09	3.28	3.22	3.24	3.29	3.62	3.65	3.84	4.29	4.45	4.72	5.20	6.05	1.91	1.89	2.41

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $1,101,590K ÷ $422,231K
= 2.61

Duolingo Inc's current ratio has shown a consistent downward trend over the years, reflecting a decrease in the company's ability to cover its short-term liabilities with its current assets. The current ratio stood at 2.41 as of December 31, 2020, indicating that the company had $2.41 in current assets for every $1 in current liabilities. However, by December 31, 2024, the current ratio had decreased to 2.61, still above the ideal threshold of 2.0 but showing a gradual decline.

This downward trend suggests that Duolingo Inc may be experiencing challenges in managing its short-term financial obligations relative to its current assets. Investors and creditors may view a declining current ratio as a potential red flag, as it could indicate liquidity issues or inefficiencies in the company's operations. It is important for the company to monitor its current ratio and take necessary steps to maintain a healthy balance between current assets and current liabilities to ensure financial stability and solvency.