Duolingo Inc (DUOL)

Current ratio

		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
Total current assets	US$ in thousands	977,278	897,798	819,105	784,941	741,234	697,183	668,331	655,150	640,635	619,271	596,344	162,568
Total current liabilities	US$ in thousands	303,722	277,362	234,934	217,106	202,813	181,766	155,630	147,326	135,775	119,131	98,645	85,051
Current ratio		3.22	3.24	3.49	3.62	3.65	3.84	4.29	4.45	4.72	5.20	6.05	1.91

March 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $977,278K ÷ $303,722K
= 3.22

Duolingo Inc's current ratio has exhibited variability over the past several quarters based on the provided data. The current ratio measures the company's ability to cover its short-term liabilities with its current assets.

From March 31, 2024, to June 30, 2021, the current ratio has generally been strong and above 3, indicating that the company had more than enough current assets to cover its short-term obligations. Specifically, the current ratio ranged from a high of 6.05 on December 31, 2021, to a low of 1.91 on June 30, 2021.

The decreasing trend in the current ratio from December 2021 to March 2024 could indicate a decrease in current assets relative to current liabilities. While current ratios above 2 are generally considered healthy, the company should ensure that its current assets are effectively managed to meet its short-term financial obligations.

It is essential for Duolingo Inc to monitor this ratio closely to maintain a healthy liquidity position and ensure that it can meet its short-term financial commitments without facing liquidity issues in the future. The company may need to assess its working capital management practices to sustain a satisfactory level of liquidity and financial stability.