Meta Platforms Inc. (META)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.67 | 2.57 | 2.32 | 2.07 | 2.20 | 2.57 | 2.52 | 2.81 | 3.15 | 4.23 | 5.43 | 6.08 | 5.05 | 5.51 | 6.02 | 4.60 | 4.40 | 4.66 | 4.47 | 5.38 |
| Quick ratio | 2.55 | 2.43 | 2.20 | 1.91 | 2.01 | 3.55 | 3.59 | 2.62 | 2.94 | 3.94 | 5.09 | 5.86 | 4.89 | 5.33 | 5.81 | 4.48 | 4.28 | 4.50 | 4.32 | 5.22 |
| Cash ratio | 2.05 | 2.00 | 1.79 | 1.48 | 1.51 | 3.05 | 3.07 | 2.08 | 2.27 | 3.26 | 4.31 | 5.05 | 4.14 | 4.66 | 5.15 | 4.00 | 3.64 | 3.92 | 3.74 | 4.57 |
Based on the liquidity ratios of Meta Platforms Inc over the past eight quarters, we can observe the following trends:
1. Current Ratio: The current ratio measures a company's ability to cover its short-term obligations with its current assets. Meta Platforms Inc has maintained a relatively stable current ratio ranging from 2.07 to 2.67 over the past two years. The current ratio has generally been above 2, indicating that the company has a strong ability to meet its short-term liabilities with its current assets.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Meta Platforms Inc's quick ratio mirrors the trend of the current ratio, remaining consistently high between 2.07 and 2.67. This indicates that the company has a strong ability to meet its short-term obligations using its most liquid assets.
3. Cash Ratio: The cash ratio, the most conservative liquidity ratio, focuses solely on a company's ability to cover its current liabilities with cash and cash equivalents. Meta Platforms Inc's cash ratio has fluctuated between 1.63 and 2.27 over the past two years, with a general downward trend. While the cash ratio has decreased slightly, the company still maintains a strong ability to cover its short-term obligations with cash on hand.
Overall, Meta Platforms Inc exhibits sound liquidity levels based on its current, quick, and cash ratios. The company's ability to meet its short-term obligations with its current assets, excluding and including inventory, as well as cash and cash equivalents, demonstrates a healthy liquidity position. It is important for investors and stakeholders to continue monitoring these ratios to ensure the company's ongoing ability to meet its financial obligations.
See also:
Meta Platforms Inc. Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -36.30 | -33.18 | -16.02 | -31.17 | -46.04 | -41.30 | -42.84 | -30.09 | -39.24 | -13.34 | 5.61 | 2.35 | 19.10 | 10.18 | 12.30 | 13.77 | 10.26 | 16.24 | 22.87 | 18.72 |
Meta Platforms Inc's cash conversion cycle has fluctuated over the past eight quarters. In Q4 2023, the company's cash conversion cycle was -24.43 days, meaning that on average, Meta Platforms converted its investments in inventory and accounts receivable into cash within approximately 24.43 days. This indicates an improvement compared to the previous quarter's cycle of -22.78 days.
Looking back over the previous quarters, the trend is not consistent. In Q2 2023, the company had a significantly lower cash conversion cycle of -5.36 days, indicating a more efficient cash conversion process, likely due to better management of inventory and receivables.
However, in Q4 2022, the company's cash conversion cycle worsened to -29.99 days, suggesting that Meta Platforms took longer to convert its investments into cash during that period. This trend of fluctuation in the cash conversion cycle is evident in the company's recent performance.
Overall, while Meta Platforms has shown variations in its cash conversion cycle, it is important for the company to focus on optimizing its working capital management to ensure a consistent and efficient cash conversion process, which can have significant impacts on its liquidity and overall financial health.