Yelp Inc (YELP)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | 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 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 154,974 | 175,864 | 182,824 | 164,013 | 143,030 |
| Quick ratio | 2.05 | 2.54 | 2.19 | 2.99 | 4.24 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($217,325K
+ $100,581K
+ $—K)
÷ $154,974K
= 2.05
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. Yelp Inc's quick ratio has shown a declining trend from 4.24 on December 31, 2020, to 2.05 on December 31, 2024.
A quick ratio of 4.24 in 2020 indicated that Yelp had $4.24 in liquid assets available to cover each $1 of current liabilities. This high ratio suggests a strong ability to meet short-term obligations without relying heavily on inventory.
However, the decreasing trend in the quick ratio over the following years indicates a potential decrease in liquidity. The rapid decline to 2.05 by December 31, 2024, signals that Yelp may have reduced its liquid assets relative to its current liabilities. This decline may raise concerns about the company's ability to cover short-term obligations without additional funding sources.
Overall, the decreasing quick ratio trend for Yelp Inc suggests a potential deterioration in liquidity and may warrant further analysis to understand the underlying factors influencing this trend.
Peer comparison
Dec 31, 2024