Shutterstock (SSTK)

The liquidity ratios of Shutterstock show a declining trend over the years.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Shutterstock's current ratio decreased from 1.90 in 2020 to 0.41 in 2024. This downward trend indicates a weakening ability to meet its short-term obligations as current assets are declining relative to current liabilities.

2. Quick Ratio: The quick ratio provides a more stringent measure of liquidity by excluding inventory from current assets. Shutterstock's quick ratio also declined from 1.84 in 2020 to 0.33 in 2024. This indicates a decreasing ability to cover immediate liabilities with assets that can be quickly converted to cash.

3. Cash Ratio: The cash ratio is the most conservative liquidity metric, focusing solely on the company's ability to cover its short-term liabilities with cash and cash equivalents. Shutterstock's cash ratio dropped from 1.67 in 2020 to 0.18 in 2024, indicating a significant decline in its ability to meet its short-term obligations with just cash.

Overall, the declining liquidity ratios of Shutterstock suggest potential challenges in managing short-term obligations and the need for the company to focus on improving its liquidity position to ensure financial stability and solvency.

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Additional liquidity measure

The cash conversion cycle of Shutterstock has shown some fluctuations over the years. In 2020, the cycle was at 22.26 days, indicating that the company took approximately 22 days to convert its investments in inventory and other resources into cash inflows from sales. This metric improved in 2021, dropping to 16.82 days, implying a more efficient management of working capital.

However, in 2022, the cash conversion cycle increased to 26.01 days, suggesting a slower conversion of investments into cash. The trend continued in 2023 and 2024, with the cycle extending to 33.67 days and 33.21 days, respectively. These longer cycles may indicate potential challenges in managing inventory, accounts receivable, and accounts payable effectively.

Overall, it is important for Shutterstock to closely monitor and optimize its cash conversion cycle to ensure efficient cash flow management and sustainable operations.