Yelp Inc (YELP)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 217,325 | 313,911 | 306,379 | 479,783 | 595,875 |
| Short-term investments | US$ in thousands | 100,581 | 132,485 | 94,244 | 10,000 | 10,930 |
| Total current liabilities | US$ in thousands | 154,974 | 175,864 | 182,824 | 164,013 | 143,030 |
| Cash ratio | 2.05 | 2.54 | 2.19 | 2.99 | 4.24 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($217,325K
+ $100,581K)
÷ $154,974K
= 2.05
The cash ratio of Yelp Inc has shown a declining trend over the years based on the data provided. As of December 31, 2020, the company had a cash ratio of 4.24, indicating a strong ability to cover short-term obligations with cash and cash equivalents. However, by December 31, 2024, the cash ratio had decreased to 2.05, suggesting a reduced liquidity position compared to previous years.
While the cash ratio above 1 is generally considered favorable as it indicates the company can cover its short-term liabilities with its cash holdings, the decreasing trend observed in Yelp's cash ratio indicates a potential decrease in liquidity over the years. This may raise concerns about the company's ability to meet its short-term obligations solely from its cash resources.
It is important for investors and stakeholders to monitor Yelp's cash ratio closely to assess its liquidity position and financial health, as changes in this ratio can provide valuable insights into the company's ability to manage its short-term financial obligations effectively.
Peer comparison
Dec 31, 2024