TripAdvisor Inc (TRIP)
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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.10 | 1.85 | 1.68 | 1.69 | 2.27 | 1.95 | 1.73 | 1.89 | 2.38 | 2.28 | 2.04 | 2.23 | 2.63 | 2.64 | 2.27 | 3.05 | 2.37 | 2.65 | 3.43 | 3.25 |
| Quick ratio | 1.69 | 1.40 | 1.28 | 1.31 | 1.87 | 1.56 | 1.34 | 1.48 | 1.92 | 1.86 | 1.59 | 1.67 | 2.03 | 1.88 | 1.75 | 2.43 | 1.89 | 2.10 | 2.80 | 2.57 |
| Cash ratio | 1.69 | 1.40 | 1.28 | 1.31 | 1.87 | 1.56 | 1.34 | 1.48 | 1.92 | 1.86 | 1.59 | 1.67 | 2.03 | 1.88 | 1.75 | 2.43 | 1.89 | 2.10 | 2.80 | 2.57 |
TripAdvisor Inc's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, provide insight into the company's ability to meet its short-term obligations.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown some fluctuation over the past few years. The ratio was relatively stable around 2.5 to 3.5 range until March 31, 2023, when it dropped to 1.89, indicating a potential decrease in liquidity. The ratio continued to decrease further to 1.69 by June 30, 2024, before slightly improving to 2.10 by December 31, 2024.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, shows a similar trend as the current ratio. It generally followed the same pattern as the current ratio, also experiencing a decline from March 31, 2023, to June 30, 2024, before a slight improvement by December 31, 2024.
The cash ratio reflects the company's ability to cover its current liabilities with its cash and cash equivalents. This ratio also followed a similar trend to the current and quick ratios, showing a decrease in liquidity from March 31, 2023, to June 30, 2024.
Overall, the decreasing trend in liquidity ratios from 2023 to mid-2024 may raise concerns about TripAdvisor Inc's ability to meet its short-term obligations. It is essential for the company to closely monitor and manage its liquidity position to ensure financial stability and solvency.
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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 231.75 | 0.00 | 0.00 |
The cash conversion cycle is a key metric that measures the efficiency with which a company manages its working capital through the process of converting raw materials into cash receipts from sales. For TripAdvisor Inc, the cash conversion cycle was 0.00 days for most quarters from March 2020 to December 2024, indicating that the company was able to effectively manage its working capital during these periods.
However, there was a notable increase in the cash conversion cycle to 231.75 days as of September 30, 2020. This spike may suggest potential issues in inventory management, accounts receivable collection, or accounts payable turnover during that particular quarter. Nonetheless, TripAdvisor Inc swiftly reduced the cash conversion cycle back to 0.00 days in subsequent quarters, reflecting improved efficiency in managing its cash flows and working capital.
Overall, the consistent low or zero cash conversion cycle for TripAdvisor Inc demonstrates strong working capital management practices, ensuring the company can efficiently generate cash from its operational activities.