DoorDash, Inc. (NASDAQ:DASH)

Current Ratio Analysis

The current ratio demonstrates a clear downward trend from March 31, 2021, through December 31, 2023, decreasing from 4.59 to 1.64. This indicates a gradual reduction in the company's short-term liquidity and its ability to cover current liabilities with current assets. However, starting in March 31, 2024, the ratio stabilizes and shows a slight improvement, reaching 2.07 by June 30, 2025, suggesting an emerging recovery in liquidity position in the more recent periods.

Quick Ratio Analysis

Similar to the current ratio, the quick ratio also declines over the initial periods from 4.35 at March 31, 2021, to a low of 1.35 between December 31, 2023, and June 30, 2024. This implies a decreasing ability to meet short-term obligations without relying on inventory sales. A notable upward movement occurs towards the end of the dataset, with the ratio increasing to 1.83 by June 30, 2025, reflecting an improving quick asset coverage and enhanced liquidity.

Cash Ratio Analysis

The cash ratio shows a corresponding decline, from 4.09 on March 31, 2021, to approximately 1.20 by late 2023 and early 2024, indicating a lower level of cash and cash equivalents relative to current liabilities over time. Despite this decline, there is a gradual upward trend beginning in the latter periods, moving to 1.65 by June 30, 2025, denoting a strengthening cash position and a more conservative liquidity strategy in recent quarters.

Overall Liquidity Trends

Across all liquidity measures—the current, quick, and cash ratios—the data shows a marked decline from early 2021 through approximately 2023, signifying a contraction in the company's short-term financial flexibility. From 2024 onward, these ratios demonstrate stabilization and a moderate increase, suggesting a turnaround or strategic adjustment aimed at improving liquidity and reducing financial risk. This pattern reflects management’s potential focus on strengthening the balance sheet and safeguarding against liquidity challenges.

Implications

The declining liquidity ratios over the initial periods could indicate increased short-term liabilities, reduced current assets, or both. The recent improvement in these ratios points to a recovery phase, possibly driven by better cash management, asset optimization, or liability restructuring. Continued monitoring is recommended to assess whether the upward trend persists and translates into sustainable financial health.

The financial data reveals notable trends in the liquidity position over the observed periods. Current assets exhibit fluctuations initially, with a decline from early 2021 through early 2022, followed by a steady and continuous increase from the first quarter of 2023 onwards. By mid-2025, current assets reach their highest recorded level, indicating an improving asset base available to meet short-term obligations.

Current liabilities demonstrate a consistent upward trajectory throughout the entire period. There is a steady increase from the beginning of 2021 through mid-2025, reflecting growing short-term obligations.

Despite the growth in current liabilities, the current ratio shows a declining trend across most of the timeline. Initially, the ratio is substantially high in early 2021, indicating a strong liquidity buffer. However, it trends downward sharply through to late 2021 and early 2022, suggesting a tightening in liquidity as current liabilities grow faster than current assets. The current ratio stabilizes around 1.6 to 1.7 during 2023 and 2024, reflecting a more balanced liquidity position, though notably lower than in 2021. By mid-2025, the current ratio improves modestly, reaching slightly above 2, indicating a strengthening liquidity position relative to the previous years.

Overall, the data suggests an initial period of tightening liquidity as current liabilities increased faster than current assets. Subsequently, there is a recovery phase characterized by better management or growth of current assets, leading to improved liquidity ratios approaching more comfortable levels by mid-2025. The rising current liabilities highlight growing short-term obligations that the company will need to manage carefully, but the improvement in the current ratio towards the end indicates positive momentum in the company’s liquidity management.

Current Assets

Experienced an initial decline followed by a sustained upward trend from 2023 onwards, reaching a peak in mid-2025.

Current Liabilities

Showed consistent growth throughout the entire period, indicating increased short-term obligations.

Current Ratio

Declined significantly from early 2021 to early 2022, stabilized between 1.6 and 1.7 across 2023 and 2024, and improved modestly by mid-2025, reflecting a gradual strengthening of liquidity.

The analysis of the financial data reveals various trends in the company's liquidity position over the observed periods.

Total Quick Assets

Total quick assets initially decreased from US$4,756 million in March 2021 to US$3,788 million in March 2023, indicating a decline during this timeframe. However, from March 2023 onwards, there is a consistent and notable increase in quick assets, reaching US$8,589 million by June 2025. This upward trend suggests an improvement in liquid asset reserves after March 2023.

Current Liabilities

Current liabilities demonstrate a steady upward trajectory throughout the entire period. Starting at US$1,094 million in March 2021, liabilities almost quadrupled, reaching US$4,696 million by June 2025. This substantial increase implies growing short-term obligations which may pressure liquidity unless adequately managed.

Quick Ratio

The quick ratio reveals the company's ability to cover current liabilities with liquid assets. It declined significantly from 4.35 in March 2021 to a low of 1.35 during the mid-year 2023 to the end of 2024 period, reflecting a deteriorating short-term liquidity position. From early 2025 onwards, the quick ratio improved, rising to 1.83 by June 2025, indicating strengthened coverage of current liabilities by quick assets despite the historically elevated liabilities.

Overall, the data shows an initial weakening in liquidity as quick assets decreased and current liabilities increased, accompanied by a falling quick ratio. Nonetheless, a recovery phase commenced around early 2023, characterized by growing quick assets and an improving quick ratio that partially offsets higher current liabilities. This pattern suggests concerted efforts or favorable conditions enhancing short-term financial stability in the latter periods analyzed.

The analysis of the quarterly financial data reveals several trends in cash assets, current liabilities, and the cash ratio over the observed periods.

Total cash assets

The total cash assets exhibited a declining trend from March 31, 2021, through December 31, 2021, falling from 4,474 million US dollars to 3,757 million US dollars. After a slight recovery in the first half of 2022, the cash assets hovered around the 3,500 to 3,800 million US dollars range until the last quarter of 2022. Starting in March 2023, cash assets demonstrated a notable upward trajectory, growing continuously and reaching 7,749 million US dollars by June 30, 2025. This represents a significant improvement in liquidity over the long term.

Current liabilities

Current liabilities increased consistently across the entire timeline. Beginning at 1,094 million US dollars on March 31, 2021, liabilities rose steadily each quarter, reaching 4,696 million US dollars by June 30, 2025. This continuous rise suggests expanding operational or financial obligations which may reflect growth activities, increased short-term borrowing, or other liabilities.

Cash ratio

The cash ratio showed a sharp decline in the initial period, dropping from 4.09 in March 2021 to 1.38 in December 2021, reflecting that cash assets decreased at a faster rate compared to current liabilities during this time. For the subsequent periods from March 2022 until December 2023, the ratio stabilized close to the 1.2 to 1.3 range, indicating a more balanced but tighter liquidity position. From March 2024 onwards, the cash ratio improved steadily, reaching 1.65 by June 2025, aligning with the rising trend in cash assets. This improvement suggests enhanced short-term financial stability and a better ability to cover current liabilities with available cash.

In summary, while current liabilities have consistently increased, the substantial growth in cash assets since early 2023 has led to improved liquidity as reflected in the rising cash ratio. The company appears to have transitioned from a period of declining liquidity to a more robust cash position, improving its capacity to meet short-term obligations.