TKO Group Holdings, Inc. (TKO)

TKO Group Holdings, Inc.'s liquidity ratios indicate the firm's ability to meet its short-term obligations. The current ratio exhibited a fluctuating trend over the years, starting at 1.46 in 2020, significantly increasing to 5.06 in 2021, then declining to 1.17 in 2022, further dropping to 1.04 in 2023, and slightly recovering to 1.30 in 2024. This suggests varying levels of liquidity over the years, with a notable improvement in 2021 followed by more modest liquidity levels in the subsequent years.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also displayed fluctuations. Starting at 1.19 in 2020, experiencing a substantial surge to 6.17 in 2021, dropping to 1.91 in 2022, falling significantly to 0.50 in 2023, and then slightly recovering to 0.78 in 2024. These variations indicate changes in the company's ability to meet its short-term obligations without relying on inventory sales for liquidity.

The cash ratio, which measures the company's ability to cover short-term liabilities with its most liquid asset, cash, showed a similar pattern to the quick ratio. Beginning at 1.19 in 2020, surging to 6.17 in 2021, declining to 1.91 in 2022, dropping sharply to 0.50 in 2023, and then slightly increasing to 0.78 in 2024. This indicates the firm had a strong cash position in 2021, but experienced a decrease in cash relative to its current liabilities in subsequent years.

Overall, TKO Group Holdings, Inc.'s liquidity ratios demonstrate fluctuations in liquidity levels over the years, with some years showing stronger liquidity positions compared to others. It is essential for the company to maintain a balance in its current assets to meet its short-term obligations efficiently. Further analysis and monitoring of liquidity trends are recommended to ensure the company's financial health and stability.

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Additional liquidity measure

TKO Group Holdings, Inc.'s cash conversion cycle has shown a significant improvement over the years. Starting at 11.45 days on December 31, 2020, the company managed to reduce this cycle to 0.85 days by December 31, 2021, further improving to 0.29 days by December 31, 2022, and reaching 0.00 days by December 31, 2023 and 2024. This trend indicates that the company has been able to efficiently manage its working capital and convert its resources into cash at a faster rate. A lower cash conversion cycle generally suggests that the company is generating cash quickly from its operations, potentially indicating strong liquidity and operational efficiency.