Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Cash Flow Statement
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- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
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Liquidity Ratios (Summary)
Alphabet Inc., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Current Ratio
- The current ratio exhibits a consistent downward trend from 3.07 in 2020 to 1.84 in 2024. This decline suggests a gradual reduction in the company's short-term liquidity over the five-year period, indicating that the proportion of current assets relative to current liabilities is decreasing year over year.
- Quick Ratio
- Similar to the current ratio, the quick ratio decreases steadily from 2.95 in 2020 to 1.66 in 2024. The quick ratio, which excludes inventory from current assets, implies that the company's immediate liquidity position is also weakening. The consistent drop may indicate increasing reliance on less liquid current assets or growing current liabilities.
- Cash Ratio
- The cash ratio shows a notable decline from 2.41 in 2020 to 1.07 in 2024. This sharper reduction relative to the other liquidity ratios points to a decrease in the most liquid assets (cash and cash equivalents) available to cover current liabilities. The trend highlights a diminishing buffer of cash resources over the years analyzed.
Current Ratio
Alphabet Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Current Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| Current Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets demonstrated a fluctuating pattern over the periods considered, starting at 174,296 million US dollars at the end of 2020. They increased to 188,143 million in 2021 before declining to 164,795 million in 2022. A slight recovery was noted in 2023, with assets rising to 171,530 million, followed by another decrease to 163,711 million by the close of 2024.
- Current Liabilities
- Current liabilities showed a consistent upward trend throughout the analyzed years, beginning at 56,834 million US dollars in 2020 and steadily increasing each year to reach 89,122 million by the end of 2024. This represents a notable growth in obligations within the one-year period.
- Current Ratio
- The current ratio exhibited a declining trend across all periods. Starting from 3.07 in 2020, the ratio decreased progressively to 1.84 by 2024. This downward movement indicates a reduction in short-term liquidity, suggesting that the company’s ability to cover short-term liabilities with current assets has diminished over time.
- Summary
- Overall, the data reveals a decreasing liquidity position, primarily driven by rising current liabilities combined with a general decline in current assets after 2021. The consistent increase in liabilities, coupled with the declining current ratio, may indicate growing pressure on liquidity management. Although there was a minor recovery in current assets in 2023, the continued rise in liabilities and the falling current ratio suggest a need for cautious monitoring of short-term financial health to ensure operational stability.
Quick Ratio
Alphabet Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash, cash equivalents, and marketable securities | ||||||
| Accounts receivable, net | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Quick Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| Quick Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Trend in Total Quick Assets
- Total quick assets demonstrated a fluctuating pattern over the five-year period. Starting at 167,624 million USD in 2020, the value increased to a peak of 178,953 million USD in 2021. Subsequently, there was a decline to 154,020 million USD in 2022, followed by a moderate recovery to 158,880 million USD in 2023. In 2024, total quick assets again decreased to 147,997 million USD, marking an overall downward trajectory from the initial peak.
- Trend in Current Liabilities
- Current liabilities exhibited a consistent upward trend throughout the period. Starting at 56,834 million USD in 2020, liabilities rose each year, reaching 64,254 million USD in 2021, 69,300 million USD in 2022, 81,814 million USD in 2023, and ultimately 89,122 million USD in 2024. This continuous increase indicates growing short-term obligations.
- Quick Ratio Analysis
- The quick ratio declined steadily over the five years, moving from 2.95 in 2020 to 1.66 in 2024. This decreasing trend reflects a reduction in the company's immediate liquidity relative to its current liabilities, suggesting a diminished cushion of quick assets available to cover short-term obligations.
- Overall Insights
- The overall trend indicates increasing current liabilities combined with declining quick assets after 2021, resulting in a continuous reduction in the quick ratio. This pattern may suggest a tightening of liquidity conditions, warranting close monitoring of short-term financial stability and potential needs for improved asset management or liability control.
Cash Ratio
Alphabet Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash, cash equivalents, and marketable securities | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Cash Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| Cash Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets demonstrate a declining trend over the observed period. Starting from approximately 136.7 billion US dollars at the end of 2020, the figures remain relatively stable into 2021 with a slight increase to about 139.6 billion US dollars. However, from 2022 onwards, there is a noticeable decline, dropping to roughly 113.8 billion in 2022, 110.9 billion in 2023, and further down to 95.7 billion US dollars by the end of 2024. This steady decrease could suggest increased utilization of cash reserves or changes in cash management policies.
- Current Liabilities
- A consistent increase in current liabilities is observable throughout the period. The liabilities grow from approximately 56.8 billion US dollars in 2020 to about 89.1 billion US dollars in 2024. The increase appears gradual but steady each year, with notable jumps particularly between 2022 and 2023, and continuing rising into 2024. This upward trend might indicate expanded short-term obligations or operational funding requirements.
- Cash Ratio
- The cash ratio shows a decreasing pattern, moving from a strong liquidity position of 2.41 at the end of 2020 down to 1.07 by the conclusion of 2024. This ratio decline aligns with the observed fall in total cash assets alongside rising current liabilities. The diminishing cash ratio suggests a reducing buffer of cash relative to short-term liabilities, which may reflect more aggressive cash deployment or evolving liquidity positions.