Palantir Technologies Inc. Class A Common Stock (PLTR)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Current ratio | 5.55 | 5.17 | 4.34 | 3.74 |
| Quick ratio | 5.41 | 4.92 | 4.11 | 3.59 |
| Cash ratio | 4.93 | 4.48 | 3.83 | 3.33 |
Palantir Technologies Inc. Class A Common Stock has demonstrated strong liquidity positions over the four-year period from December 31, 2020, to December 31, 2023, as reflected in its liquidity ratios. The current ratio, a measure of the company's ability to cover short-term obligations with its current assets, has shown a consistent increasing trend, reaching 5.55 in 2023 from 3.74 in 2020. This indicates that the company has significantly improved its ability to meet its immediate financial obligations using its current assets.
Similarly, the quick ratio, which excludes inventory from current assets to provide a more stringent measure of liquidity, has also exhibited a positive trend, indicating the company's ability to cover current liabilities with its most liquid assets. The quick ratio improved from 3.59 in 2020 to 5.41 in 2023, further strengthening the company's liquidity position.
The cash ratio, which evaluates the company's ability to cover its current liabilities with cash and cash equivalents only, has also increased steadily over the period. The cash ratio rose from 3.33 in 2020 to 4.93 in 2023, reflecting the company's enhanced ability to settle short-term obligations with its readily available cash resources.
Overall, the consistent improvement in Palantir Technologies Inc.'s liquidity ratios indicates a strong liquidity position, suggesting that the company has sufficient short-term assets to meet its current financial obligations efficiently and effectively. This trend bodes well for the company's financial stability and ability to navigate short-term challenges.
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Palantir Technologies Inc. Class A Common Stock Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Cash conversion cycle | days | 49.58 | 23.98 | 4.03 | 74.09 |
The cash conversion cycle of Palantir Technologies Inc. Class A Common Stock has shown fluctuations over the past four years. In 2023, the cash conversion cycle increased to 49.58 days compared to 23.98 days in 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during 2023.
In 2021, the cash conversion cycle was significantly lower at 4.03 days, reflecting an efficient management of cash flows and working capital during that period. However, there was a notable increase in the cycle in 2020, reaching 74.09 days, suggesting a potential delay in converting investments into cash in that year.
Overall, the trend in Palantir Technologies Inc.'s cash conversion cycle indicates fluctuations in the efficiency of its working capital management and cash flow conversion over the analyzed period. Further analysis and comparison with industry benchmarks can provide additional insights into the company's liquidity and operational efficiency.