TKO Group Holdings, Inc. (TKO)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.30 | 1.17 | 0.99 | 0.99 | 1.04 | 1.25 | 1.29 | 1.17 | 1.17 | 1.46 | 1.60 | 1.52 | 1.51 |
| Quick ratio | 0.78 | 0.60 | 0.37 | 0.42 | 0.50 | 0.47 | 1.68 | 1.93 | 1.91 | 0.98 | 1.04 | 1.05 | 1.00 |
| Cash ratio | 0.78 | 0.60 | 0.37 | 0.42 | 0.50 | 0.47 | 1.68 | 1.93 | 1.91 | 0.98 | 1.04 | 1.05 | 1.00 |
TKO Group Holdings, Inc.'s liquidity ratios show fluctuations over the period from December 31, 2021, to December 31, 2024. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has generally remained above 1, indicating a healthy liquidity position. However, it started to decrease after June 30, 2023, reaching a low of 0.99 on March 31, 2024, before slightly improving to 1.30 by December 31, 2024.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also showed variability during the period. It exceeded 1 in most quarters up to December 31, 2022, suggesting a strong ability to cover immediate obligations. However, it dropped significantly to below 1 in subsequent quarters, hitting a low of 0.37 on June 30, 2024, before recovering slightly to 0.78 by December 31, 2024.
The cash ratio, which is the most conservative liquidity ratio as it focuses solely on cash and cash equivalents to cover short-term liabilities, exhibited a similar trend to the quick ratio. It remained at or above 1 up to June 30, 2023, indicating a robust cash position. However, it declined sharply thereafter, falling to 0.37 on June 30, 2024, before rising to 0.78 by December 31, 2024.
Overall, while TKO Group Holdings, Inc. maintained a current ratio above 1 throughout the period, the decreasing trend in the quick ratio and cash ratio towards the latter part of the analyzed period may suggest a potential liquidity challenge that the company needs to address to ensure its ability to meet short-term obligations in a timely manner.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.39 | 0.37 | 0.29 | 2.12 | 3.73 | 5.93 | 4.52 |
The cash conversion cycle of TKO Group Holdings, Inc. has shown a consistent improvement over the years, reflecting the company's efficiency in managing its working capital. The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
At the end of December 31, 2021, the company had a cash conversion cycle of 4.52 days, indicating that it took approximately 4.52 days for the company to convert its investments into cash. Over the subsequent quarters, the company managed to further streamline its operations, with the cash conversion cycle decreasing to 0.29 days by the end of December 31, 2022.
From March 31, 2023, onwards, the company's cash conversion cycle remained at 0.00 days, suggesting that TKO Group Holdings, Inc. was able to effectively manage its working capital by quickly converting its investments into cash. This efficient management of working capital can positively impact the company's cash flow and overall financial health by allowing it to generate cash quickly from its operational activities.