Netflix Inc (NFLX)

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 1.12 1.29 1.33 1.26 1.17 1.14 1.05 1.05 0.95 1.17 1.23 1.27 1.25 1.24 1.12 0.82 0.90 0.73 0.85 0.61
Quick ratio 0.99 1.10 1.13 1.08 1.07 0.97 0.89 0.89 0.82 1.03 1.09 1.13 1.15 1.14 1.02 0.72 0.81 0.61 0.72 0.49
Cash ratio 0.81 0.94 0.99 0.94 0.76 0.79 0.78 0.78 0.71 0.94 0.99 1.06 1.05 1.06 0.94 0.66 0.73 0.61 0.72 0.49

The liquidity ratios of Netflix Inc. provide an insight into its ability to meet short-term obligations. The current ratio, which measures the company's ability to pay short-term liabilities with short-term assets, has fluctuated over the previous year, ranging from 1.05 to 1.33. Generally, a current ratio above 1 indicates that the company can cover its short-term liabilities, with higher ratios implying a stronger ability to do so.

The quick ratio, also known as the acid-test ratio, excludes inventory from current assets and focuses on the most liquid assets. This ratio has remained consistent at 1.05 to 1.33, indicating that the company has enough highly liquid assets to cover its short-term obligations, similar to the current ratio.

The cash ratio, which is a more stringent measure of liquidity as it only considers cash and cash equivalents, has ranged from 0.97 to 1.19. This suggests that Netflix has adequate cash to cover its short-term liabilities, although the ratio does fluctuate.

Overall, the liquidity ratios of Netflix indicate that the company has generally maintained a solid ability to meet its short-term financial obligations over the past year, as evidenced by the current, quick, and cash ratios consistently staying above 1. However, the fluctuations in these ratios suggest the need for continual monitoring of the company's liquidity position.

See also:

Netflix 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 11.48 13.42 2.55 2.11 15.20 5.90 0.45 -2.54 -6.40 -4.22 -4.27 -3.89 -4.84 -4.05 -1.48 -5.88 -10.28 -13.85 -14.49 -15.22

The cash conversion cycle, which measures how quickly a company can convert its investment in inventory and other resources into cash flows from sales, has varied for Netflix Inc. based on the data provided.

Looking at the trend over the past eight quarters, we can observe that the cash conversion cycle fluctuated between positive and negative values. A positive cash conversion cycle indicates that the company takes longer to convert its investments in inventory and other resources into cash flows from sales, while a negative cash conversion cycle implies that Netflix is efficiently managing its working capital to quickly convert investments into cash.

In the most recent quarter, ending Dec 31, 2023, the cash conversion cycle was exceptionally low at 0.09 days, suggesting efficient management of working capital and a quick conversion of investments into cash. However, it's important to note that the cash conversion cycle has shown variability in recent quarters, with fluctuations between positive and negative values.

Overall, a detailed analysis of the individual components of the cash conversion cycle, including days sales outstanding, days inventory outstanding, and days payable outstanding, would provide further insights into Netflix's working capital management and efficiency in turning its resources into cash.