Take-Two Interactive Software Inc. (NASDAQ:TTWO)

Current Ratio

The current ratio exhibited a generally stable trend from 2020 to 2022, maintaining values close to or slightly below 1.9, indicative of a relatively strong short-term liquidity position during this period. However, a significant decline occurred in 2023, dropping sharply to 0.65, which suggests a considerably weakened ability to cover current liabilities with current assets. Although a modest recovery is noted in 2024 and 2025, the ratio remains below the earlier levels, signaling ongoing constraints in short-term liquidity management.

Quick Ratio

The quick ratio mirrors the trajectory of the current ratio, starting with values around 1.5 to 1.7 during 2020-2022, which points to sufficient liquid assets excluding inventories. A notable decrease is observed in 2023, plunging to 0.54, highlighting potential difficulties in meeting immediate obligations without relying on inventory liquidation. Subsequent years show a slight improvement but the ratio persistently remains lower than the earlier period, which may reflect a more conservative asset structure or increased short-term liabilities.

Cash Ratio

The cash ratio, representing the most liquid measure of assets relative to current liabilities, declined progressively from 1.25 in 2020 to 1.38 in 2022, indicating a strong cash position initially. This metric then experienced a pronounced fall in 2023 to 0.34, suggesting a substantial reduction in cash and cash equivalents relative to current liabilities. Although there is a minor recovery in 2024 and 2025, the ratio persists at less than half the levels seen in the early years, reinforcing concerns regarding cash liquidity.

Overall Liquidity Insight

The company’s short-term liquidity ratios demonstrate a clear downward trend after 2022, with all three indicators—current, quick, and cash ratios—dropping significantly in 2023. This pattern suggests a shift in the company’s liquidity profile, potentially due to increased current liabilities or reduced current assets. The partial rebounds in the following years do not restore liquidity to earlier levels, indicating cautious liquidity management or structural changes in working capital. Such trends warrant close monitoring as they may impact the company’s ability to meet short-term obligations timely.

The analysis of the annual financial data reveals notable fluctuations in liquidity and working capital management over the examined period.

Current Assets

Current assets displayed an initial upward trend, increasing from 3,493,351 thousand US dollars in 2020 to a peak of 4,220,515 thousand US dollars in 2021. This was followed by a decline to 3,871,088 thousand in 2022, a more pronounced drop to 2,508,100 thousand in 2023, and further fluctuations reaching 2,815,900 thousand by 2025. The decline after 2021 suggests a reduction in readily available resources or short-term assets.

Current Liabilities

Current liabilities grew moderately from 2,038,539 thousand US dollars in 2020 to 2,234,715 thousand in 2021, then slightly decreased to 2,104,964 thousand in 2022. From 2022 onwards, liabilities increased markedly, peaking at 3,851,600 thousand in 2023 before decreasing to 2,406,400 thousand in 2024 and rising again to 3,615,800 thousand in 2025. This indicates periodic increases in short-term obligations, which could impact liquidity risk.

Current Ratio

The current ratio exhibited a strong position above 1.7 from 2020 through 2022, indicating sufficient short-term asset coverage relative to liabilities. However, there was a sharp deterioration beginning in 2023, where the ratio declined to 0.65, notably below the generally accepted threshold of 1.0, signaling potential liquidity concerns. Although it improved slightly to 0.94 in 2024, it remained below 1, and declined again to 0.78 in 2025. This trend highlights increasing challenges in meeting short-term obligations with current assets during the latter years.

In summary, the data indicates an initial phase of healthy liquidity followed by a transition to tighter short-term financial conditions. The decreased current assets combined with rising or volatile current liabilities have pressured the current ratio downward, signaling increased liquidity risk. These trends warrant closer monitoring and possible strategic actions to improve working capital management and ensure adequate short-term financial stability.

The financial data reveals significant changes in liquidity and working capital management over the observed periods. The total quick assets experienced fluctuations, initially increasing from 3,140,826 thousand US dollars in the year ending March 31, 2020 to a peak of 3,823,160 thousand US dollars by the year ending March 31, 2021. Following that peak, there was a decrease to 3,491,372 thousand US dollars in 2022 and a further notable decline through 2023 and 2024, reaching a low of 1,707,800 thousand US dollars. There is a modest recovery in 2025, where quick assets rise again to 2,251,500 thousand US dollars.

Current liabilities show a different pattern, with a generally upward trend over the period. Starting at 2,038,539 thousand US dollars in 2020, current liabilities increased moderately to 2,234,715 thousand US dollars in 2021, then slightly declined in 2022 to 2,104,964 thousand US dollars. However, a sharp rise is observed in 2023, reaching 3,851,600 thousand US dollars, before dropping back to 2,406,400 thousand US dollars in 2024 and again surging to 3,615,800 thousand US dollars in 2025.

The quick ratio, which measures the company's ability to meet short-term obligations with its most liquid assets, follows a declining trend despite its initial strength. Beginning at 1.54 in 2020, the ratio improved slightly to 1.71 in 2021 and marginally decreased to 1.66 in 2022. However, there is a marked deterioration in 2023, with the ratio falling to 0.54, indicating potential liquidity concerns. Subsequent years show a partial improvement, but the ratio remains below 1, registering 0.71 in 2024 and decreasing slightly to 0.62 in 2025.

Overall, the data suggests that the company has faced challenges in maintaining its liquidity position, particularly from 2023 onwards. The decline in quick assets combined with rising and volatile current liabilities has pressured the quick ratio downward, which may warrant close monitoring and potential strategic adjustments to ensure adequate short-term financial health.

Total cash assets

The total cash assets exhibited growth from 2,548,271 thousand USD in March 2020 to a peak of 3,270,398 thousand USD in March 2021. This was followed by a decline to 2,911,939 thousand USD in March 2022. A more significant decrease occurred in the subsequent years, reaching 1,322,000 thousand USD in March 2023 and further declining to 1,028,100 thousand USD in March 2024. An improvement is observed in March 2025, where cash assets increased to 1,480,400 thousand USD.

Current liabilities

Current liabilities showed fluctuations over the period. Starting at 2,038,539 thousand USD in March 2020, they increased moderately to 2,234,715 thousand USD in March 2021. There was a slight decrease in March 2022 to 2,104,964 thousand USD. However, a substantial surge occurred in March 2023, rising to 3,851,600 thousand USD, followed by a reduction to 2,406,400 thousand USD in March 2024. In March 2025, current liabilities increased sharply again to 3,615,800 thousand USD.

Cash ratio

The cash ratio, which measures the company's ability to cover current liabilities with cash and cash equivalents, showed a declining trend over the analyzed years. It started at a relatively strong 1.25 in March 2020 and improved slightly to 1.46 in March 2021, followed by a small decrease to 1.38 in March 2022. A notable drop to 0.34 in March 2023 indicates a reduced liquidity position, despite some recovery to 0.43 in March 2024. The ratio decreased slightly again to 0.41 in March 2025, remaining below 0.5 for the last three years.

Overall observations

The data reflects a general weakening in liquidity over the period, as indicated by the declining cash ratio from well above 1.0 to below 0.5 in recent years. The company experienced volatile movements in both cash assets and current liabilities, with the most significant changes occurring around March 2023. Cash assets decreased markedly while current liabilities rose sharply, adversely impacting the cash ratio. Although there was some recovery in cash assets by March 2025, current liabilities also increased, keeping liquidity ratios low. This suggests increased short-term financial obligations relative to liquid assets, potentially signaling greater liquidity risk or strategic shifts in working capital management.