Trade Desk Inc. (NASDAQ:TTD)

Current Ratio

The current ratio exhibited an overall upward trend from 1.57 in 2020 to 1.86 in 2024. After a steady increase from 1.57 to 1.9 between 2020 and 2022, there was a slight decline to 1.72 in 2023 followed by a rebound to 1.86 in 2024. This indicates a generally improving ability to cover short-term liabilities with current assets over the period, despite a minor fluctuation in 2023.

Quick Ratio

The quick ratio followed a trend similar to the current ratio, rising from 1.5 in 2020 to 1.83 in 2024. The ratio increased consistently until 2022, reaching 1.87, then decreased slightly in 2023 to 1.69, before improving again in 2024. This pattern reflects a strengthening position in liquid assets excluding inventory, though with a temporary dip in 2023.

Cash Ratio

The cash ratio showed a clear progressive enhancement from 0.42 in 2020 to 0.67 in 2024. Notably, there was a more pronounced increase from 0.42 to 0.71 between 2020 and 2022, followed by a decrease to 0.55 in 2023 and a subsequent rise to 0.67 in 2024. This suggests that the company improved its cash and cash-equivalent holdings relative to current liabilities over the observed period, though with a decline in 2023.

The analysis of the annual financial data reveals several notable trends in the company's liquidity position over the five-year period ending in 2024.

Current Assets

Current assets have displayed a consistent upward trajectory, increasing from approximately 2.31 billion US dollars in 2020 to over 5.33 billion US dollars in 2024. This steady growth indicates an expansion in the company's short-term resources available to cover liabilities.

Current Liabilities

Current liabilities have also grown steadily but at a slightly slower pace, rising from around 1.47 billion US dollars in 2020 to about 2.87 billion US dollars in 2024. The increase reflects a growth in the company's short-term obligations, which necessitates adequate liquidity management.

Current Ratio

The current ratio, a key liquidity metric measuring the company's ability to meet short-term obligations, has fluctuated within a relatively stable range. Starting at 1.57 in 2020, it increased to 1.71 in 2021 and peaked at 1.9 in 2022. It then dipped slightly to 1.72 in 2023 before improving to 1.86 in 2024. This pattern suggests that while the company maintains a comfortable cushion of current assets over current liabilities, there was a minor contraction in liquidity in 2023 that was subsequently recovered.

Overall, the data points to a company that has been successfully growing its current assets and managing its current liabilities, resulting in a generally robust liquidity position. The current ratio consistently remains above 1.5, indicating sound short-term financial health throughout the observed period.

The analysis of the provided financial data reveals several notable trends in the company's liquidity position over the five-year period ending December 31, 2024.

Total quick assets

The total quick assets show a consistent upward trend, increasing from approximately 2.21 billion US dollars in 2020 to about 5.25 billion US dollars in 2024. This represents a more than twofold growth over the period, indicating an improvement in the company's liquid assets available to cover immediate liabilities.

Current liabilities

Current liabilities have also risen steadily, from roughly 1.47 billion US dollars in 2020 to nearly 2.87 billion US dollars in 2024. The increase reflects higher short-term obligations, growing by nearly 95% in the five-year timeframe.

Quick ratio

The quick ratio fluctuates but generally reflects strong liquidity throughout the period. It rises from 1.50 in 2020 to a peak of 1.87 in 2022, followed by a slight decline to 1.69 in 2023 and an increase again to 1.83 in 2024. Values above 1.0 suggest the company maintains sufficient quick assets to meet current liabilities without relying on inventory turnover.

Overall, the company's liquid asset base has grown significantly, outpacing the increase in current liabilities. Despite some minor fluctuations in the quick ratio, the firm maintains a cushion above the commonly accepted benchmark of 1.0, indicating strong short-term financial health and the ability to cover immediate obligations effectively.

Total cash assets

Over the observed period from 2020 to 2024, total cash assets demonstrate a general upward trend. The value increased significantly from approximately $624 million in 2020 to nearly $1.92 billion in 2024. Notably, there was a sharp rise between 2021 and 2022, where cash assets grew by around 51%, followed by a slight decline in 2023 before reaching the highest level in 2024.

Current liabilities

Current liabilities showed a steady increase throughout the period. Starting at about $1.47 billion in 2020, liabilities grew consistently each year, reaching approximately $2.87 billion in 2024. The increase appears nearly linear, indicating a persistent rise in obligations over time.

Cash ratio

The cash ratio, which measures the liquidity by comparing cash assets to current liabilities, shows some fluctuations but an overall improving trend. It increased from 0.42 in 2020 to a peak of 0.71 in 2022, suggesting an enhanced capacity to cover short-term liabilities with cash during this timeframe. Following this peak, the ratio declined to 0.55 in 2023 but improved again to 0.67 in 2024. Despite the rise in current liabilities, the company managed to maintain a relatively strong liquidity position as reflected in these ratios.