Electronic Arts Inc (EA)

Liquidity ratios

	Mar 31, 2025	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
Current ratio	0.95	1.38	1.43	1.45	1.37	1.33	1.38	1.28	1.21	1.23	1.34	1.24	1.18	1.20	1.32	1.89	2.43	2.21	2.75	2.61
Quick ratio	0.85	1.26	1.28	1.30	1.24	1.21	1.20	1.11	1.05	1.09	1.09	1.06	1.06	1.10	1.17	1.73	2.32	2.14	2.60	2.52
Cash ratio	0.65	1.02	0.92	1.12	1.06	0.95	0.83	0.93	0.84	0.82	0.73	0.85	0.87	0.83	0.77	1.51	2.15	1.92	2.43	2.32

Electronic Arts Inc's liquidity ratios have shown some fluctuations over the past few years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has decreased from 2.61 on June 30, 2020, to 0.95 on March 31, 2025. This declining trend may indicate potential issues with the company's ability to meet its short-term obligations.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, followed a similar pattern. It decreased from 2.52 on June 30, 2020, to 0.85 on March 31, 2025. This suggests that Electronic Arts Inc may have fewer liquid assets available to cover immediate liabilities as compared to previous years.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, also showed a decline over the period. It decreased from 2.32 on June 30, 2020, to 0.65 on March 31, 2025. This could indicate that the company has become less capable of meeting its short-term obligations solely with its cash resources.

Overall, the decreasing trend in Electronic Arts Inc's liquidity ratios raises concerns about its ability to meet its short-term financial obligations. It suggests that the company may need to improve its liquidity management to ensure financial stability and mitigate liquidity risks in the future.

Additional liquidity measure

		Mar 31, 2025	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
Cash conversion cycle	days	8.67	18.33	12.42	4.14	4.37	28.76	20.18	10.06	13.46	28.53	18.86	15.57	14.11	36.24	30.13	18.02	10.33	27.59	-16.69	19.31

The cash conversion cycle of Electronic Arts Inc has shown fluctuations over the last few years. The cash conversion cycle is a measure of how long it takes a company to convert its investments in inventory into cash flows from sales.

At the end of March 2023, the cash conversion cycle was at its lowest point of 4.37 days, indicating the company was efficient in converting its inventory into cash. However, by the end of December 2023, the cycle had increased to 28.76 days, suggesting a longer time taken to convert inventory to sales and then into cash.

The cycle decreased again by the end of March 2024 to 4.14 days, showing improved efficiency in managing working capital. It increased slightly by the end of September 2024 to 12.42 days before decreasing again by the end of March 2025 to 8.67 days.

Overall, the fluctuations in Electronic Arts Inc's cash conversion cycle indicate varying levels of efficiency in managing its inventory and collecting cash from sales over the reporting periods. Business operations, inventory management, and collection practices may have impacted these changes, warranting further analysis to determine the underlying reasons for the fluctuations.