Expedia Group Inc. (NASDAQ:EXPE)

The liquidity profile exhibits a period of sustained vulnerability characterized by ratios below parity, followed by a sharp increase in liquid reserves during 2020 and a subsequent partial correction in 2021. Throughout the majority of the analyzed period, current assets were insufficient to cover immediate liabilities, with a notable exception in 2020 when the company reached a net-positive liquidity position.

Current Ratio

The current ratio remained below 1.00 for most of the period, starting at 0.70 in 2017 and reaching a low of 0.64 in 2018. A significant improvement occurred in 2020, where the ratio peaked at 1.04, indicating that current assets fully covered current liabilities for the first time in the observed window. This was followed by a moderation to 0.87 in 2021.

Quick Ratio

The quick ratio trended closely with the current ratio, moving from 0.67 in 2017 to a peak of 0.90 in 2020 before declining to 0.77 in 2021. The minimal variance between the current and quick ratios suggests that inventory or other non-quick current assets constitute a negligible portion of the asset base, meaning liquidity is primarily driven by cash and receivables.

Cash Ratio

The cash ratio demonstrated the most pronounced volatility and the steepest increase. After declining to 0.34 in 2018, the ratio surged to 0.77 by 2020. Although it decreased to 0.64 in 2021, this value remains significantly higher than the pre-2020 levels, suggesting a strategic accumulation of cash to bolster short-term solvency and mitigate financial risk.

The liquidity profile from 2017 to 2021 is characterized by a consistent trend where current liabilities generally exceed current assets, resulting in a current ratio that remained below 1.0 for the majority of the analyzed period.

Current Ratio Volatility

The current ratio fluctuated between a low of 0.64 in 2018 and a high of 1.04 in 2020. After a period of relative stability between 2017 and 2019, where the ratio ranged from 0.64 to 0.72, a significant spike occurred in 2020, followed by a correction to 0.87 in 2021.

Asset and Liability Dynamics

Current assets exhibited an overall growth trend, rising from 5,540 million USD in 2017 to 8,181 million USD in 2021, despite a contraction in 2020. Current liabilities demonstrated higher volatility, peaking at 10,714 million USD in 2019 before experiencing a sharp decline to 5,406 million USD in 2020 and subsequently increasing to 9,450 million USD in 2021.

Liquidity Position Analysis

The temporary improvement in the current ratio to 1.04 in 2020 was primarily driven by a substantial reduction in current liabilities rather than an increase in current assets. By 2021, although current assets reached their highest level in the five-year period, the sharp increase in current liabilities brought the ratio back below the 1.0 threshold, indicating that short-term obligations once again exceed available short-term assets.

The analysis of liquidity from 2017 to 2021 reveals a period of volatility in the relationship between quick assets and current liabilities. The quick ratio consistently remained below the 1.0 threshold, indicating that the company did not maintain sufficient highly liquid assets to cover all current obligations instantaneously without relying on inventory or other less liquid current assets.

Quick Assets Trend

Total quick assets exhibited significant fluctuations, starting at 5,250 million US dollars in 2017 and reaching a peak of 7,269 million US dollars by 2021. A notable surge occurred in 2019, followed by a sharp decline in 2020 to 4,860 million US dollars, before rebounding strongly in 2021.

Current Liabilities Trend

Current liabilities showed a general upward trajectory from 2017 to 2019, peaking at 10,714 million US dollars. A substantial reduction in liabilities was observed in 2020, where they fell to 5,406 million US dollars, representing the lowest level in the five-year period. This was followed by a sharp increase to 9,450 million US dollars in 2021.

Quick Ratio Interpretation

The quick ratio fluctuated between a low of 0.61 in 2018 and a high of 0.90 in 2020. The peak in 2020 was primarily driven by the significant contraction of current liabilities rather than an increase in quick assets. By 2021, the ratio moderated to 0.77, as the growth in current liabilities outpaced the recovery in quick assets.

The liquidity profile exhibits significant volatility between 2017 and 2021, characterized by fluctuations in both cash reserves and short-term obligations. While the cash ratio remained relatively stable between 2017 and 2019, a marked increase in liquidity was observed in 2020, followed by a slight normalization in 2021.

Total Cash Assets

Cash assets experienced a non-linear growth pattern. After a decline in 2018 to US$ 2,730 million, assets grew to US$ 4,620 million in 2019. Despite a minor dip in 2020, the period ended with a substantial increase to US$ 6,005 million in 2021, representing a significant expansion of the cash base compared to the 2017 baseline.

Current Liabilities

Current liabilities showed substantial volatility, peaking in 2019 at US$ 10,714 million. A sharp contraction occurred in 2020, where liabilities fell to US$ 5,406 million, the lowest level in the analyzed period. This was followed by a rapid increase to US$ 9,450 million by the end of 2021.

Cash Ratio Trends

The cash ratio fluctuated from 0.43 in 2017 to a low of 0.34 in 2018 before recovering to 0.43 in 2019. A peak was reached in 2020 at 0.77, primarily driven by the concurrent increase in cash and the sharp reduction in current liabilities. In 2021, the ratio adjusted to 0.64; although this was a decrease from the 2020 peak, it remains notably higher than the ratios observed from 2017 through 2019, suggesting an overall improvement in immediate liquidity capacity.