TripAdvisor Inc (TRIP)

TripAdvisor Inc has shown consistent liquidity strength over the past five years based on its liquidity ratios. The current ratio, which measures the firm's ability to cover its short-term obligations with its current assets, has improved from 2.37 in 2020 to 2.10 in 2024. This indicates that the company has more than enough current assets to meet its current liabilities.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also demonstrated stability, ranging from 1.69 to 2.03 over the same period. This suggests that the company can cover its short-term obligations even when inventory is excluded.

The cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) relative to current liabilities, has remained strong and relatively constant at above 1.69 throughout the five-year period. This signifies that TripAdvisor Inc has ample cash reserves to meet its short-term obligations without relying on other current assets.

Overall, the liquidity ratios of TripAdvisor Inc reflect a solid financial position, with sufficient liquid assets to meet its short-term financial commitments and operating needs.

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Additional liquidity measure

Based on the data provided, TripAdvisor Inc's cash conversion cycle has been consistently reported as 0.00 days from December 31, 2020, to December 31, 2024. A cash conversion cycle of 0.00 days indicates that the company is able to convert its investments in inventory and accounts receivable into cash almost instantaneously. This suggests that TripAdvisor Inc is efficient in managing its working capital and is able to quickly collect payments from customers and convert them into cash, ultimately contributing to its liquidity and financial health. However, it is important to note that a cash conversion cycle of 0.00 days may also signal potential issues with data accuracy or limitations in the calculation methodology.