Trade Desk Inc (TTD)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 1,369,460 895,129 1,030,510 754,154 437,353
Short-term investments US$ in thousands 552,026 485,159 416,080 204,625 186,685
Receivables US$ in thousands 3,330,340 2,870,310 2,347,200 2,020,720 1,584,110
Total current liabilities US$ in thousands 2,873,460 2,510,840 2,029,320 1,803,300 1,474,680
Quick ratio 1.83 1.69 1.87 1.65 1.50

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,369,460K + $552,026K + $3,330,340K) ÷ $2,873,460K
= 1.83

The quick ratio of Trade Desk Inc. has exhibited notable fluctuations over the period from December 31, 2020, to December 31, 2024. Starting at 1.50 in 2020, this liquidity metric increased to 1.65 in 2021, reflecting an improvement in the company's ability to cover its short-term liabilities with its most liquid assets. The upward trend continued into 2022, with the quick ratio reaching 1.87, indicating an enhanced liquidity position and a more conservative approach to managing near-term obligations.

However, a decline was observed in 2023, where the ratio decreased to 1.69, suggesting a slight reduction in liquidity buffer, although it still remained above 1.5, which generally signifies adequate short-term financial health. The ratio then rebounded in 2024 to 1.83, surpassing the levels of the previous year and indicating a restoration or reinforcement of the company's liquidity cushion.

Overall, the trend demonstrates that Trade Desk Inc. has maintained a liquidity position that comfortably exceeds the threshold of 1, which is often considered a benchmark for sound liquidity. The fluctuations likely reflect variations in the company's current assets, particularly cash and receivables relative to current liabilities, influenced by operational, financial, or strategic factors during this period. The consistent maintenance above the 1.5 mark across these years suggests prudent liquidity management, positioning the company well to meet its short-term obligations while adapting to changing financial conditions.