Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
DoorDash, Inc., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.66 | 1.64 | 1.86 | 2.59 | 3.94 | |
| Quick ratio | 1.41 | 1.38 | 1.54 | 2.33 | 3.67 | |
| Cash ratio | 1.25 | 1.23 | 1.38 | 2.13 | 3.47 |
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 demonstrates a declining trend from 3.94 in 2020 to 1.64 in 2023, with a slight increase to 1.66 in 2024. This indicates a consistent reduction in the company's ability to cover its short-term liabilities with its current assets over the analyzed period, but suggests a minor stabilization or improvement in the final year.
- Quick Ratio
- The quick ratio follows a similar downward trajectory, decreasing from 3.67 in 2020 to 1.38 in 2023, before marginally increasing to 1.41 in 2024. This pattern implies a reduction in highly liquid assets relative to current liabilities, signaling potentially tighter short-term liquidity conditions, with some recovery observed at the end of the period.
- Cash Ratio
- The cash ratio also declines steadily from 3.47 in 2020 to 1.23 in 2023, then slightly rises to 1.25 in 2024. This shows a decreasing level of cash and cash equivalents available to meet short-term obligations, mirroring the trend seen in other liquidity measures, yet indicating an attempt to maintain a minimum cash buffer in the most recent year.
Current Ratio
DoorDash, 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 | 7,386) | 5,597) | 4,720) | 4,565) | 5,517) | |
| Current liabilities | 4,438) | 3,410) | 2,544) | 1,760) | 1,402) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.66 | 1.64 | 1.86 | 2.59 | 3.94 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Airbnb Inc. | 1.69 | 1.66 | 1.86 | 1.95 | 1.73 | |
| Booking Holdings Inc. | 1.31 | 1.28 | 1.86 | 2.10 | 3.56 | |
| Chipotle Mexican Grill Inc. | 1.52 | 1.57 | 1.28 | 1.58 | 1.73 | |
| McDonald’s Corp. | 1.19 | 1.16 | 1.43 | 1.78 | 1.01 | |
| Starbucks Corp. | 0.75 | 0.78 | 0.77 | 1.20 | 1.06 | |
| Current Ratio, Sector | ||||||
| Consumer Services | 1.31 | 1.28 | 1.49 | 1.77 | 1.73 | |
| Current Ratio, Industry | ||||||
| Consumer Discretionary | 1.22 | 1.20 | 1.15 | 1.25 | 1.19 | |
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
= 7,386 ÷ 4,438 = 1.66
2 Click competitor name to see calculations.
The current ratio demonstrates a declining trend over the observed period, followed by a stabilization in the most recent year. Initially strong, the ratio decreased significantly before leveling off. This suggests a shift in the company’s short-term financial position.
- Current Ratio Trend
- In 2020, the current ratio stood at 3.94, indicating a robust ability to cover short-term obligations with short-term assets. A substantial decrease was observed in 2021, with the ratio falling to 2.59. This decline continued in 2022, reaching 1.86, and further decreased to 1.64 in 2023. However, the ratio experienced minimal change in 2024, remaining at 1.66.
- Asset and Liability Dynamics
- Current assets decreased from US$5,517 million in 2020 to US$4,565 million in 2021, contributing to the initial decline in the current ratio. While current assets saw a slight increase in 2022 to US$4,720 million, they continued to grow, reaching US$7,386 million in 2024. Current liabilities exhibited a consistent upward trend throughout the period, increasing from US$1,402 million in 2020 to US$4,438 million in 2024. The faster growth of current liabilities compared to current assets is the primary driver of the decreasing current ratio.
The stabilization of the current ratio in 2024 suggests that the rate of increase in current liabilities may be moderating relative to the growth in current assets, or that the company has reached a new equilibrium in its short-term financing structure. Despite this stabilization, the current ratio remains considerably lower than its value in 2020, indicating a reduced margin of safety in meeting short-term obligations.
Quick Ratio
DoorDash, Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 4,019) | 2,656) | 1,977) | 2,504) | 4,345) | |
| Restricted cash | 190) | 105) | —) | —) | —) | |
| Short-term marketable securities | 1,322) | 1,422) | 1,544) | 1,253) | 514) | |
| Accounts receivable, net | 732) | 533) | 400) | 349) | 291) | |
| Total quick assets | 6,263) | 4,716) | 3,921) | 4,106) | 5,150) | |
| Current liabilities | 4,438) | 3,410) | 2,544) | 1,760) | 1,402) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 1.41 | 1.38 | 1.54 | 2.33 | 3.67 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Airbnb Inc. | 1.64 | 1.62 | 1.83 | 1.91 | 1.69 | |
| Booking Holdings Inc. | 1.24 | 1.20 | 1.73 | 2.00 | 3.38 | |
| Chipotle Mexican Grill Inc. | 1.34 | 1.37 | 1.09 | 1.35 | 1.28 | |
| McDonald’s Corp. | 0.90 | 1.03 | 1.24 | 1.64 | 0.90 | |
| Starbucks Corp. | 0.52 | 0.55 | 0.48 | 0.93 | 0.75 | |
| Quick Ratio, Sector | ||||||
| Consumer Services | 1.18 | 1.15 | 1.31 | 1.61 | 1.54 | |
| Quick Ratio, Industry | ||||||
| Consumer Discretionary | 0.91 | 0.86 | 0.81 | 0.93 | 0.89 | |
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
= 6,263 ÷ 4,438 = 1.41
2 Click competitor name to see calculations.
The financial data reveals several significant trends over the given period. There is a notable fluctuation in total quick assets, current liabilities, and the quick ratio from 2020 through 2024.
- Total quick assets
- The total quick assets show a descending trend from 2020 to 2022, dropping from 5,150 million US dollars in 2020 to 3,921 million US dollars in 2022. This decline indicates a reduction in highly liquid assets available to cover short-term obligations. However, from 2022 onward, there is a recovery and growth in quick assets, reaching 4,716 million in 2023 and further increasing sharply to 6,263 million in 2024. This rebound signifies an improvement in liquid asset holdings, potentially enhancing the company’s short-term financial flexibility.
- Current liabilities
- Current liabilities display a consistently increasing pattern throughout the entire period. Starting at 1,402 million US dollars at the end of 2020, liabilities grow significantly each year, reaching 4,438 million US dollars by the end of 2024. The upward trajectory suggests increasing short-term financial obligations, which may be the result of expanded operations, increased borrowing, or other financial commitments.
- Quick ratio
- The quick ratio, which measures the company’s ability to meet short-term liabilities with its most liquid assets, shows a declining trend from 3.67 in 2020 to 1.38 in 2023, indicating a decreasing buffer relative to current liabilities. This drop reflects a tightening liquidity position despite fluctuations in absolute quick asset amounts and a rise in current liabilities. In 2024, the quick ratio stabilizes slightly, increasing marginally to 1.41, which suggests a plateauing of liquidity constraints but still maintaining a lower ratio than in 2020.
In summary, while quick assets declined initially and then rallied strongly by 2024, current liabilities increased substantially without a commensurate increase in liquidity ratios until the very end of the period. The declining quick ratio up to 2023 indicates growing pressure on the company’s liquidity position despite recovering asset levels, although the modest improvement in 2024 may point to early signs of stabilization in short-term financial health.
Cash Ratio
DoorDash, 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 and cash equivalents | 4,019) | 2,656) | 1,977) | 2,504) | 4,345) | |
| Restricted cash | 190) | 105) | —) | —) | —) | |
| Short-term marketable securities | 1,322) | 1,422) | 1,544) | 1,253) | 514) | |
| Total cash assets | 5,531) | 4,183) | 3,521) | 3,757) | 4,859) | |
| Current liabilities | 4,438) | 3,410) | 2,544) | 1,760) | 1,402) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 1.25 | 1.23 | 1.38 | 2.13 | 3.47 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Airbnb Inc. | 1.04 | 1.01 | 1.21 | 1.31 | 1.24 | |
| Booking Holdings Inc. | 1.03 | 0.95 | 1.46 | 1.79 | 3.23 | |
| Chipotle Mexican Grill Inc. | 1.22 | 1.26 | 0.98 | 1.23 | 1.16 | |
| McDonald’s Corp. | 0.28 | 0.67 | 0.68 | 1.17 | 0.56 | |
| Starbucks Corp. | 0.39 | 0.42 | 0.35 | 0.81 | 0.63 | |
| Cash Ratio, Sector | ||||||
| Consumer Services | 0.86 | 0.84 | 0.98 | 1.30 | 1.29 | |
| Cash Ratio, Industry | ||||||
| Consumer Discretionary | 0.52 | 0.48 | 0.47 | 0.64 | 0.59 | |
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
= 5,531 ÷ 4,438 = 1.25
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets initially declined from $4,859 million in 2020 to $3,757 million in 2021, followed by a further decrease to $3,521 million in 2022. However, from 2022 onward, there is a notable recovery, with cash assets increasing to $4,183 million in 2023 and further rising to $5,531 million in 2024. This indicates a reversal in cash holdings, suggesting improved cash generation or financing activities in the latter periods.
- Current Liabilities
- Current liabilities show a continuous and significant upward trend over the entire period. Starting from $1,402 million in 2020, liabilities increased to $1,760 million in 2021, followed by a steeper rise to $2,544 million in 2022. The upward trajectory continues with liabilities reaching $3,410 million in 2023 and $4,438 million in 2024. This steady rise indicates growing short-term obligations that may impact liquidity if not managed effectively.
- Cash Ratio
- The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, has been declining over the period. From a high of 3.47 in 2020, the ratio decreased sharply to 2.13 in 2021, then further to 1.38 in 2022, and dropped marginally to 1.23 in 2023. In 2024, the ratio slightly improves to 1.25 but remains considerably lower than the 2020 level. Despite the recovery in total cash assets, the cash ratio’s decline suggests that current liabilities have grown at a faster pace, thereby reducing liquidity coverage.
- Overall Analysis
- The data displays an overall weakening in short-term liquidity position, driven primarily by the substantial increase in current liabilities outpacing the growth in cash assets. Although cash assets have rebounded after a decline in the early years, the persistent rise in liabilities has resulted in a diminished cash ratio, moving from a very strong level to just above 1. This situation highlights the importance of monitoring working capital management closely and focusing on strategies to control liability growth or enhance cash reserves further to maintain financial stability.