Ziff Davis Inc (ZD)

Based on the provided data, the liquidity ratios of Ziff Davis Inc show significant fluctuations over the five-year period from 2020 to 2024:

1. Current Ratio:
- The current ratio improved from 0.71 in 2020 to 2.62 in 2021, indicating a positive trend in the company's ability to meet short-term obligations with current assets.
- However, there was a slight decrease from 2021 to 2022, with the current ratio standing at 2.51. The ratio further increased in 2023 to 2.76.
- A notable decline was observed in 2024, with the current ratio dropping to 1.41, which may signal potential liquidity challenges compared to the previous year.

2. Quick Ratio:
- The quick ratio also displayed a similar trend to the current ratio, improving from 0.57 in 2020 to 2.49 in 2021, demonstrating a strong ability to cover immediate liabilities with quick assets.
- Like the current ratio, there was a slight decrease from 2021 to 2022, with the quick ratio at 2.35. The ratio increased in 2023 to 2.55.
- A significant decline was noted in 2024, with the quick ratio decreasing to 1.30, indicating a potential decrease in the company's ability to meet short-term obligations without relying on inventory.

3. Cash Ratio:
- The cash ratio showed a substantial increase from 0.20 in 2020 to 1.86 in 2021, suggesting a strong liquidity position with a higher proportion of cash to cover current liabilities.
- There was a slight decrease in the cash ratio from 2021 to 2022, standing at 1.64. The ratio increased slightly in 2023 to 1.77.
- A notable decrease was observed in 2024, with the cash ratio dropping to 0.56, indicating a lower ability to cover short-term obligations solely with cash.

Overall, while the company showed improvements in liquidity ratios over the first three years, there was a significant decline in 2024. This indicates a potential need for Ziff Davis Inc to closely monitor and manage its liquidity position to ensure it can meet its short-term obligations effectively in the future.

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Additional liquidity measure

The cash conversion cycle of Ziff Davis Inc has shown significant improvement over the years. As of December 31, 2020, the company had a cash conversion cycle of 102.56 days, indicating that it took just over three months to convert its investments in inventory and receivables into cash.

By December 31, 2021, Ziff Davis Inc's cash conversion cycle had improved dramatically, reaching -163.74 days. A negative cash conversion cycle suggests that the company was able to convert its investments into cash before paying its suppliers, indicating strong efficiency in managing its working capital.

This trend continued into the following years, as the cash conversion cycle remained negative. By December 31, 2022, it stood at -145.56 days, further decreasing to -151.96 days by December 31, 2023, and -128.09 days by December 31, 2024.

Overall, the consistently negative cash conversion cycle indicates that Ziff Davis Inc has been very effective in managing its cash flow and working capital, efficiently converting its investments into cash and optimizing its operational efficiency.