Alphabet Inc Class C (GOOG)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 2.10 | 2.38 | 2.93 | 3.07 | 3.37 |
| Quick ratio | 1.94 | 2.22 | 2.80 | 2.96 | 3.25 |
| Cash ratio | 1.36 | 1.64 | 2.17 | 2.41 | 2.65 |
Based on the provided data, the liquidity ratios of Alphabet Inc have shown a consistent 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 3.37 in 2019 to 2.10 in 2023. This indicates a reduction in the company's short-term liquidity position over the years.
Similarly, the quick ratio, which excludes inventory from current assets, has also decreased from 3.35 in 2019 to 2.10 in 2023. This suggests a decline in the company's ability to quickly meet its short-term obligations without relying on inventory.
The cash ratio, which measures the proportion of cash and cash equivalents to current liabilities, has also seen a downward trend from 2.74 in 2019 to 1.51 in 2023. This indicates a decreasing ability to cover its short-term liabilities with its cash and cash equivalents alone.
Overall, the decreasing trend in liquidity ratios over the years may signal a potential decrease in Alphabet Inc.'s ability to meet its short-term obligations using its current assets, excluding inventory, and cash reserves. This trend should be further analyzed in conjunction with other financial metrics to assess the company's overall financial health.
See also:
Alphabet Inc Class C Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 36.78 | 45.13 | 41.04 | 41.82 | 38.84 |
The cash conversion cycle for Alphabet Inc has fluctuated over the past five years. The trend indicates that the company has been able to manage its operating cycle more efficiently in recent years. In 2023, the cash conversion cycle decreased to 36.43 days from 44.85 days in 2022, which suggests that Alphabet Inc has been able to more effectively convert its investments in inventory and receivables into cash.
A lower cash conversion cycle generally indicates that a company is managing its working capital more efficiently, which can lead to improved liquidity and a stronger financial position. This trend may be a positive signal for investors and creditors, indicating that Alphabet Inc has been able to streamline its operations and manage its cash flow more effectively in recent years. It is worth noting that a declining trend in the cash conversion cycle can also signify potential improvements in inventory management and accounts receivable collection, contributing to the company's overall financial health.