Etsy Inc (ETSY)

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	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cash and cash equivalents	US$ in thousands	811,178	818,939	759,211	788,837	914,323	741,958	841,512	786,796	921,278	789,990	758,874	756,237	780,196	619,402	2,053,880	1,163,680	1,244,100	1,144,970	677,524	442,354
Short-term investments	US$ in thousands	228,322	226,022	240,679	254,875	236,118	234,930	235,263	252,666	250,413	251,165	247,816	225,983	204,416	197,430	430,727	502,569	425,119	379,586	365,659	361,640
Total current liabilities	US$ in thousands	665,113	552,960	564,485	565,121	710,781	548,817	503,219	499,113	631,755	497,246	449,902	483,205	615,588	471,007	407,000	427,045	454,664	340,942	279,579	158,849
Cash ratio		1.56	1.89	1.77	1.85	1.62	1.78	2.14	2.08	1.85	2.09	2.24	2.03	1.60	1.73	6.10	3.90	3.67	4.47	3.73	5.06

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($811,178K + $228,322K) ÷ $665,113K
= 1.56

The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to cover short-term obligations.

Analyzing Etsy Inc's cash ratio over the years from March 31, 2020, to December 31, 2024, we observe fluctuations in the ratio. The company's cash ratio started at a relatively high level of 5.06 on March 31, 2020, which indicated a strong ability to cover short-term liabilities with cash and cash equivalents.

However, over the next few quarters, the cash ratio decreased to 3.73 by June 30, 2020, and continued to fluctuate between 3.67 and 4.47 until March 31, 2021. From June 30, 2021, the ratio saw a significant increase to 6.10, indicating a strong position in terms of liquidity.

Subsequently, the cash ratio decreased sharply to 1.60 by December 31, 2021, and continued to fluctuate around 2.00 until December 31, 2024. This decrease in the ratio suggests a decrease in the company's ability to cover short-term liabilities with cash and cash equivalents.

Overall, the cash ratio of Etsy Inc has shown fluctuations over the period, with some periods indicating stronger liquidity positions than others. It is essential for stakeholders to monitor changes in the cash ratio to assess the company's short-term liquidity and financial health effectively.