TKO Group Holdings, Inc. (TKO)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 525,556 | 235,839 | 180,574 | 874,688 | 462,102 |
| Short-term investments | US$ in thousands | — | — | 258,487 | 280,957 | 131,295 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 670,657 | 472,140 | 230,179 | 187,320 | 497,474 |
| Quick ratio | 0.78 | 0.50 | 1.91 | 6.17 | 1.19 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($525,556K
+ $—K
+ $—K)
÷ $670,657K
= 0.78
The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to meet its short-term obligations with its most liquid assets. Looking at the historical trend of TKO Group Holdings, Inc.'s quick ratio from 2020 to 2024, several observations can be made:
1. December 31, 2020: The quick ratio was 1.19, indicating that the company had $1.19 in liquid assets available to cover each dollar of current liabilities.
2. December 31, 2021: The quick ratio significantly improved to 6.17, suggesting a substantial increase in the company's liquidity and ability to meet short-term obligations easily.
3. December 31, 2022: The quick ratio remained healthy at 1.91, indicating that the company still had a comfortable level of liquid assets relative to its current liabilities.
4. December 31, 2023: The quick ratio declined sharply to 0.50, potentially signaling a decrease in the company's ability to cover its short-term obligations with liquid assets. This could raise concerns about liquidity risk.
5. December 31, 2024: The quick ratio slightly improved to 0.78 compared to the previous year but remained below the ideal benchmark of 1.0. This indicates that the company may still face challenges in meeting its short-term obligations.
In conclusion, while TKO Group Holdings, Inc. exhibited strong liquidity in 2021, the quick ratio deteriorated in 2023 and 2024, raising concerns about the company's ability to cover its short-term liabilities with its liquid assets during those years. Further analysis of the company's liquidity management and financial health would be beneficial to understand the reasons behind these fluctuations in the quick ratio.
Peer comparison
Dec 31, 2024