Netflix Inc (NFLX)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 7,804,730 | 7,116,910 | 5,147,180 | 6,027,800 | 8,205,550 |
| Short-term investments | US$ in thousands | 1,779,010 | 20,973 | 911,276 | 0 | — |
| Receivables | US$ in thousands | 2,402,410 | 1,639,260 | 2,424,390 | 913,883 | 742,169 |
| Total current liabilities | US$ in thousands | 10,755,400 | 8,860,660 | 7,930,970 | 8,488,970 | 7,805,780 |
| Quick ratio | 1.11 | 0.99 | 1.07 | 0.82 | 1.15 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($7,804,730K
+ $1,779,010K
+ $2,402,410K)
÷ $10,755,400K
= 1.11
The quick ratio of Netflix Inc has shown some fluctuations over the past five years. As of December 31, 2020, the quick ratio was healthy at 1.15, indicating the company had $1.15 of liquid assets available to cover each dollar of current liabilities. However, there was a decline in the quick ratio to 0.82 by December 31, 2021, which may raise concerns about the company's ability to meet its short-term obligations using its most liquid assets.
There was a slight improvement in the quick ratio to 1.07 by December 31, 2022, suggesting a better position in terms of liquidity. Subsequently, by December 31, 2023, the quick ratio decreased to 0.99, falling below the ideal value of 1, which may indicate a tighter liquidity position compared to the previous year.
However, by December 31, 2024, the quick ratio had increased to 1.11, showing a positive trend towards increased liquidity. Overall, the fluctuation in Netflix's quick ratio over the years may signify varying levels of ability to meet short-term obligations with its liquid assets. It would be essential for stakeholders to closely monitor this ratio to assess the company's liquidity position effectively.