Take-Two Interactive Software Inc (TTWO)

Take-Two Interactive Software Inc's liquidity ratios have seen fluctuations over the past five years.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has been declining. In 2024, the current ratio is 0.94, which indicates that the company may have difficulties in covering its current liabilities with its current assets. This downward trend is concerning and may suggest potential liquidity issues.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows a decreasing trend, indicating a possible difficulty in meeting short-term obligations without relying on inventory.

The cash ratio, which provides the most conservative measure of liquidity by only considering cash and cash equivalents, has also decreased over the years, further raising concerns about the company's ability to cover its short-term obligations with readily available cash.

Overall, the downward trend in all three liquidity ratios suggests that Take-Two Interactive Software Inc may be facing challenges in maintaining sufficient liquidity to meet its short-term commitments. Investors and creditors may view this as a potential risk factor when assessing the company's financial health and stability.

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Additional liquidity measure

Take-Two Interactive Software Inc's cash conversion cycle has shown significant fluctuations over the past five years. The company's cash conversion cycle decreased drastically from 105.02 days in 2023 to 23.37 days in 2024, indicating a more efficient management of working capital. This improvement suggests that Take-Two Interactive was able to reduce the time it takes to convert its investments in inventory and accounts receivable into cash.

In 2022, the cash conversion cycle was 44.83 days, showing a moderate level of efficiency compared to the following year. In 2021 and 2020, the company experienced higher cash conversion cycles of 51.78 days and 62.86 days, respectively. These higher figures suggest that Take-Two Interactive had slower cash conversion processes during those periods.

Overall, the decreasing trend in the cash conversion cycle over the years indicates that Take-Two Interactive Software Inc has been able to manage its working capital more effectively and improve its cash flow efficiency. This may have positive implications for the company's financial health and operational performance.