Gogo Inc (GOGO)

Gogo Inc's liquidity position, as reflected in its current ratio, has shown improvement over the years, indicating the company's ability to meet its short-term obligations. The current ratio increased from 1.17 in 2020 to 4.37 in 2023, before dropping slightly to 1.77 in 2024. This suggests that Gogo Inc had more current assets to cover its current liabilities, particularly in 2023.

On the other hand, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, displayed some fluctuations. The quick ratio decreased from 0.99 in 2020 to 0.78 in 2021 before rising significantly to 2.25 in 2023. However, it dropped substantially to 0.23 in 2024, signaling a potential vulnerability in the company's ability to meet its short-term obligations without relying on inventory.

Regarding the cash ratio, which focuses solely on the most liquid assets, the ratios mirror the trends seen in the quick ratio, with a notable decrease from 2.25 in 2023 to 0.23 in 2024. This suggests that Gogo Inc's reliance on cash to cover its current liabilities decreased significantly in 2024.

Overall, while Gogo Inc's current ratio indicates an improved liquidity position over the years, the fluctuating quick and cash ratios in recent years may warrant further analysis to understand the company's changing liquidity profile.

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Additional liquidity measure

The cash conversion cycle for Gogo Inc has shown fluctuations over the years based on the provided data. As of December 31, 2020 and 2021, the cash conversion cycle was relatively stable around 121 days. However, there was a noticeable increase in the cash conversion cycle to 132.93 days by December 31, 2022, indicating a longer time for the company to convert its investments in inventory and accounts receivable back into cash.

The trend continued to worsen significantly by December 31, 2023, with the cash conversion cycle reaching 173.47 days. This prolonged cycle suggests potential liquidity challenges or inefficiencies in managing working capital, which could impact the company's financial health and operations.

By December 31, 2024, the cash conversion cycle peaked at 360.92 days, reflecting a substantial delay in converting resources into cash. This extended cycle could signify possible issues in inventory management, collection of receivables, or cash flow constraints, warranting further analysis and corrective actions by Gogo Inc to improve its liquidity position and operational efficiency.