Ziff Davis Inc (ZD)

The current ratio, quick ratio, and cash ratio of Ziff Davis Inc have shown varying trends over the past five years.

- The current ratio reflects Ziff Davis Inc's ability to meet its short-term obligations with its current assets. The company's current ratio has been generally increasing over the past five years, indicating an improvement in liquidity. However, there was a significant improvement from 2020 to 2021, where the ratio increased from 0.71 to 2.62, suggesting a more solid financial position in terms of current assets to current liabilities.

- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Similar to the current ratio, the quick ratio has followed an upward trend over the period, showing a consistent improvement in the company's ability to cover its short-term liabilities with its most liquid assets. The substantial increase from 2020 to 2021 further reinforces the company's strengthened liquidity position.

- The cash ratio represents the proportion of current liabilities that could be covered by the company's cash and cash equivalents alone. Ziff Davis Inc's cash ratio has shown significant volatility over the years, with fluctuations observed in the range of ratios. Despite the fluctuations, there has been an overall increasing trend in the cash ratio, indicating an enhanced ability to settle short-term obligations with cash on hand.

Overall, the liquidity ratios of Ziff Davis Inc demonstrate a positive trend, with notable improvements in its ability to meet short-term obligations with current assets and liquid resources. The company's strengthening liquidity position, as evidenced by the increasing ratios over the years, suggests better financial health and a more robust ability to manage its working capital efficiently.

---

Additional liquidity measure

The cash conversion cycle is a critical metric used to assess a company's efficiency in managing its working capital. In the case of Ziff Davis Inc, the trend in the cash conversion cycle over the past five years has been fluctuating.

The company's cash conversion cycle was consistently negative in 2022 and 2023, indicating that Ziff Davis was able to convert its investments in inventory and receivables into cash relatively quickly during these years. This could be a positive sign, as a negative cash conversion cycle suggests that the company is able to generate cash quickly from its operations.

However, in 2021, the cash conversion cycle increased significantly to 81.50 days, indicating that it took Ziff Davis longer to convert its investments in inventory and receivables into cash during that period. This may have been a result of slower collections from customers or higher inventory levels, which could have tied up cash in the business.

In comparison, 2020 and 2019 saw more favorable cash conversion cycles of 79.79 days and 69.68 days, respectively, suggesting that Ziff Davis was more efficient in managing its working capital during those years.

Overall, while Ziff Davis Inc has shown some fluctuations in its cash conversion cycle in recent years, it is essential for the company to continue monitoring and managing its working capital effectively to ensure optimal cash flow and operational efficiency.