Clear Secure Inc (YOU)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Current ratio | 1.39 | 1.87 | 2.47 |
| Quick ratio | 1.31 | 1.78 | 2.35 |
| Cash ratio | 1.31 | 1.77 | 2.33 |
Clear Secure Inc's liquidity ratios have shown a declining trend over the past three years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, decreased from 2.47 in 2021 to 1.39 in 2023. This indicates that Clear Secure Inc may be facing challenges in meeting its short-term financial obligations.
Similarly, the quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also decreased from 2.35 in 2021 to 1.31 in 2023. This suggests that Clear Secure Inc may have a reduced ability to meet its immediate financial obligations without relying on inventory.
The cash ratio, which measures the company's ability to cover current liabilities with cash and cash equivalents, followed a similar downward trend from 2.33 in 2021 to 1.31 in 2023. This indicates that Clear Secure Inc may have a decreased capacity to settle its current liabilities solely with cash reserves.
Overall, the declining trend in Clear Secure Inc's liquidity ratios suggests a potential liquidity risk for the company. It may need to closely monitor its cash flow management and ensure efficient utilization of its current assets to improve its liquidity position and meet its short-term financial obligations in the future.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Cash conversion cycle | days | 22.95 | 19.45 | 21.69 |
The cash conversion cycle of Clear Secure Inc has shown some fluctuations over the past three years. In 2023, the company's cash conversion cycle increased to 22.95 days from 19.45 days in 2022, but remained slightly higher than the 21.69 days reported in 2021. This indicates that Clear Secure Inc took longer to convert its investments in inventory into cash in 2023 compared to the previous year.
A longer cash conversion cycle may suggest that the company is taking more time to sell its inventory or collect accounts receivable, which can tie up cash and potentially impact liquidity. It is important for Clear Secure Inc to monitor and manage its cash conversion cycle effectively to ensure efficient working capital management and cash flow generation.