Godaddy Inc (GDDY)

The liquidity ratios of Godaddy Inc have shown fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has ranged from 0.47 in 2023 to 0.78 in 2021. A higher current ratio is generally considered more favorable as it indicates a stronger liquidity position. The quick ratio, also known as the acid-test ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has ranged from 0.19 in 2023 to 0.53 in 2021. The cash ratio, which specifically focuses on the most liquid assets such as cash and cash equivalents to cover short-term liabilities, has shown similar fluctuations, ranging from 0.19 in 2023 to 0.53 in 2021. Overall, while the current ratio and quick ratio have shown some improvement in recent years, the company may need to focus on improving its liquidity position, especially in 2023 where the ratios were lower compared to other years.

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Additional liquidity measure

The cash conversion cycle of Godaddy Inc shows a trend of improvement over the years, as indicated by the decreasing number of days required to convert resources invested in the company's operations back into cash. In 2020, the cycle was 133.42 days, which decreased to 122.52 days in 2021, then to 117.21 days in 2022. Notably, by the end of 2023 and 2024, the cash conversion cycle reached 0.00 days, suggesting that the company was able to efficiently manage its working capital, minimize the time taken to collect receivables, pay off payables, and effectively utilize its inventory. This significant improvement in cash conversion cycle signifies the company's enhanced liquidity position and operational efficiency.