eBay Inc (EBAY)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 2.44 | 2.18 | 1.97 | 1.80 | 1.16 |
| Quick ratio | 1.45 | 1.14 | 1.61 | 0.98 | 0.85 |
| Cash ratio | 1.43 | 1.12 | 1.58 | 0.87 | 0.68 |
EBay Inc.'s liquidity ratios have depicted a favorable trend over the past five years, reflecting the company's strong ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has steadily increased from 1.16 in 2019 to 2.44 in 2023. This indicates that EBay has significantly strengthened its liquidity position.
Similarly, the quick ratio, also known as the acid-test ratio, has shown a positive trend, climbing from 1.15 in 2019 to 2.44 in 2023. This ratio excludes inventory from current assets as it may not be easily convertible to cash in the short term. The consistent increase in the quick ratio suggests that EBay has a strong ability to meet its immediate obligations without relying on inventory liquidation.
Furthermore, the cash ratio, which measures the company's ability to cover its short-term liabilities with its most liquid assets (cash and cash equivalents), has shown a notable improvement from 0.98 in 2019 to 2.42 in 2023. This demonstrates EBay's enhanced capacity to settle its short-term obligations solely with cash on hand, providing a secure cushion in times of financial need.
Overall, EBay Inc.'s liquidity ratios reflect a robust financial position with increasing liquidity over the years, indicating the company's ability to efficiently manage its short-term financial obligations and potential unexpected cash requirements.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -31.01 | -32.19 | -32.65 | 201.74 | -18.34 |
EBay Inc.'s cash conversion cycle has shown a consistent improvement over the last five years, reflecting efficient management of its working capital. The company has successfully reduced the time it takes to convert its resource inputs into cash inflows.
The negative values of the cash conversion cycle indicate that EBay Inc. is able to generate cash from its operating activities before paying its suppliers, thereby leveraging a shorter cash cycle to its advantage. This suggests strong liquidity position and effective inventory management by the company.
Overall, EBay Inc.'s downward trend in the cash conversion cycle from -15.64 days in 2019 to -31.01 days in 2023 indicates that the company is improving its efficiency in managing cash flow, which could lead to increased profitability and sustainable growth in the future.