Alphabet Inc Class A (GOOGL)

Liquidity ratios

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
Current ratio 1.84 1.95 2.08 2.15 2.10 2.04 2.17 2.35 2.38 2.52 2.81 2.87 2.93 2.98 3.15 3.10 3.07 3.41 3.41 3.66
Quick ratio 1.66 1.76 1.90 1.98 1.94 1.87 2.02 2.20 2.22 2.31 2.64 2.74 2.80 2.86 3.03 2.95 2.96 3.28 3.27 3.51
Cash ratio 1.07 1.15 1.29 1.40 1.36 1.39 1.52 1.67 1.64 1.76 2.04 2.16 2.17 2.30 2.44 2.44 2.41 2.75 2.77 2.92

Based on the provided data, the liquidity ratios for Alphabet Inc Class A have been analyzed as follows:

1. Current Ratio:
The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. Alphabet Inc Class A's current ratio has been consistently above 2.0, indicating a strong liquidity position. The current ratio peaked at 3.66 on March 31, 2020, and has since trended downwards, reaching 1.84 on December 31, 2024. While the ratio has decreased over time, it still remains above 1.0, suggesting that the company can meet its short-term obligations.

2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Similar to the current ratio, Alphabet Inc Class A's quick ratio has shown a declining trend from 3.51 on March 31, 2020, to 1.66 on December 31, 2024. Although the quick ratio has decreased over the years, it has generally stayed above 1.0, indicating the company's ability to cover its short-term obligations without relying on inventory.

3. Cash Ratio:
The cash ratio is the most conservative liquidity measure as it considers only cash and cash equivalents in relation to current liabilities. Alphabet Inc Class A's cash ratio has also witnessed a downward trend from 2.92 on March 31, 2020, to 1.07 on December 31, 2024. Despite the decreasing trend, the cash ratio has remained above 1.0, implying that the company has sufficient cash to meet its short-term liabilities.

In summary, Alphabet Inc Class A has maintained healthy liquidity positions over the years, as indicated by its current, quick, and cash ratios consistently above 1.0. However, the decreasing trend in these ratios may suggest a need for the company to closely manage its liquidity in the future to ensure it can meet its short-term obligations effectively.

Additional liquidity measure

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 conversion cycle days 34.84 34.99 36.76 34.86 36.80 42.89 40.50 41.09 45.09 37.49 41.33 41.67 41.12 41.60 40.42 37.21 42.10 38.12 32.04 36.45

The cash conversion cycle of Alphabet Inc Class A has shown some fluctuation over the periods specified. It measures the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

From March 31, 2020, to September 30, 2020, the cash conversion cycle decreased from 36.45 days to 32.04 days, indicating an improvement in the efficiency of Alphabet's cash management. However, the cycle started to increase again, reaching 42.10 days by December 31, 2020, and continued to fluctuate up until December 31, 2024, where it stood at 34.84 days.

Overall, Alphabet Inc's cash conversion cycle has shown variability, indicating potential shifts in its working capital management strategies and operational efficiency. It is essential for the company to monitor and optimize this cycle to ensure optimal liquidity and profitability in the long term.