Godaddy Inc (GDDY)

Godaddy Inc's liquidity ratios have shown a decreasing trend over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has decreased from 0.79 in 2019 to 0.47 in 2023. This indicates that the company may have difficulty in covering its short-term liabilities with its current assets.

Similarly, the quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown a decline over the years, from 0.77 in 2019 to 0.45 in 2023. This suggests that Godaddy Inc may struggle to meet its short-term obligations without relying on inventory.

The cash ratio, which provides the most conservative view of liquidity by only considering cash and cash equivalents to cover short-term liabilities, has also decreased from 0.76 in 2019 to 0.43 in 2023. This indicates a decreasing ability for the company to meet its immediate obligations with readily available cash.

Overall, the decreasing trend in Godaddy Inc's liquidity ratios raises concerns about its ability to efficiently manage its short-term financial obligations. Management should closely monitor liquidity levels and consider implementing strategies to improve the liquidity position of the company.

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Additional liquidity measure

The cash conversion cycle for Godaddy Inc has shown fluctuations over the past five years. The company has been able to effectively manage its operating cycle, converting cash into inventory, then into accounts receivable, and finally back into cash.

In 2023, the cash conversion cycle decreased to -27.78 days compared to the previous year. This indicates that Godaddy Inc is efficient in managing its working capital, with the ability to quickly convert inventory and receivables into cash. The negative value suggests that the company is able to collect cash from its sales before paying its suppliers.

In 2022, the cash conversion cycle also showed improvement at -26.82 days, further demonstrating the company's effectiveness in managing its cash flow and working capital.

However, in 2021 and 2020, the cash conversion cycle increased to -16.58 days and -11.47 days respectively, which could signify potential delays in the collection of receivables or the conversion of inventory into sales.

In 2019, the cash conversion cycle was at -22.01 days, indicating that the company was efficient in managing its working capital, similar to the performance seen in 2023.

Overall, Godaddy Inc has generally maintained a negative cash conversion cycle over the past five years, which implies strong cash management practices and efficient working capital utilization. Monitoring this metric can help assess the company's liquidity and efficiency in generating cash from its operational activities.