Yelp Inc (YELP)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.55 | 3.30 | 2.73 | 2.97 | 3.26 | 3.13 | 3.40 | 3.26 | 3.93 | 4.43 | 4.33 | 4.51 | 4.98 | 4.27 | 5.12 | 4.23 | 3.98 | 3.67 | 3.91 | 5.93 |
| Quick ratio | 3.37 | 3.14 | 2.59 | 2.83 | 2.97 | 2.80 | 3.09 | 3.00 | 3.64 | 4.30 | 4.21 | 4.40 | 4.86 | 4.16 | 5.01 | 4.07 | 5.67 | 5.45 | 5.75 | 8.01 |
| Cash ratio | 2.54 | 2.30 | 1.89 | 2.13 | 2.25 | 2.17 | 2.40 | 2.43 | 2.99 | 3.60 | 3.57 | 3.84 | 4.24 | 3.64 | 4.36 | 3.46 | 4.88 | 4.70 | 5.05 | 7.32 |
Yelp Inc's liquidity ratios indicate the company's ability to meet its short-term obligations effectively. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has shown a generally increasing trend over the past eight quarters, ranging from 2.73 to 3.55. This indicates that Yelp has a relatively strong liquidity position, with more than enough current assets to cover its current liabilities.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also shows a similar increasing trend, ranging from 2.73 to 3.55. This suggests that Yelp can quickly meet its short-term obligations even without relying on inventory.
Furthermore, the cash ratio, which measures the company's ability to cover current liabilities with only cash and cash equivalents, has also displayed a generally positive trend, ranging from 2.02 to 2.72. This indicates that Yelp holds a significant amount of cash relative to its current liabilities, enhancing its ability to meet immediate financial obligations.
Overall, Yelp Inc's liquidity ratios suggest that the company is in a healthy financial position, with ample liquidity to support its short-term operations and obligations. The consistent improvement in these ratios over the past eight quarters indicates good financial management and potential strength in weathering short-term financial challenges.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 34.78 | 28.45 | 16.11 | -8.71 | -14.77 | 49.03 | 37.84 | 43.87 | -37.71 | -55.08 | 25.02 | 71.17 | -19.87 | -32.35 | 14.81 | -4.07 | 3.34 | 18.34 | 17.86 | 15.46 |
The cash conversion cycle (CCC) measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter CCC indicates efficient management of working capital and quicker conversion of resources into cash.
Based on the data provided, Yelp Inc's CCC has fluctuated over the past eight quarters. In Q4 2023, the CCC was 1.97 days, indicating that Yelp took less than two days to convert its investments into cash flows. This suggests efficient management of working capital during that quarter.
However, in Q3 2023, the CCC significantly increased to 23.15 days, indicating a longer period to convert investments into cash, which may signal potential inefficiencies in managing working capital during that period.
Moreover, in Q2 2023, the CCC decreased to 4.46 days, showing improved efficiency compared to the previous quarter. In Q1 2023, the CCC was negative at -19.79 days, indicating that Yelp was able to convert investments into cash before paying off its current liabilities, which can be seen as a favorable position.
Looking back further, in Q2 2022 and Q1 2022, Yelp had negative CCC values, indicating a strong ability to manage working capital efficiently during those periods.
Overall, Yelp's cash conversion cycle has shown variability, with some quarters demonstrating efficient management of working capital and quick conversion into cash, while others showing longer cycles. Analyzing trends in the CCC can provide insights into Yelp's liquidity management and operational efficiency over time.