Trade Desk Inc. (NASDAQ:TTD)

Current Ratio Trend

The current ratio exhibited a decreasing trend from March 2020 (1.96) to December 2020 (1.57), indicating a reduction in short-term liquidity during that period. Subsequently, the ratio improved gradually through 2021, reaching approximately 1.9 by early 2023. However, from early 2023 onward, the ratio demonstrated a slight decline, fluctuating but trending downward to 1.71 by June 2025. This suggests a modest weakening in the company’s ability to cover short-term obligations with current assets over the latest periods.

Quick Ratio Trend

The quick ratio followed a similar pattern to the current ratio, initially decreasing from 1.9 in March 2020 to a low of 1.5 by December 2020. This points to a decline in the company’s immediate liquidity excluding inventory. A recovery phase occurred in 2021, with the ratio reaching around 1.87 in early 2023. Thereafter, a gradual decrease is observed, with the quick ratio reducing to 1.68 by June 2025, indicating a slight reduction in liquid assets relative to current liabilities towards the most recent quarters.

Cash Ratio Trend

The cash ratio showed more pronounced volatility than the other liquidity ratios but followed a broadly similar pattern. It started at 0.61 in March 2020, declined to a low point of 0.42 by December 2020, reflecting a reduction in cash and cash equivalents compared to current liabilities. A recovery was noted through 2021 and early 2022, peaking at around 0.74 by September 2022. Despite some fluctuations, the cash ratio declined again after early 2023, dropping to 0.57 by June 2025. This indicates a moderate decrease over time in the availability of cash relative to the company’s short-term liabilities.

Overall Liquidity Insights

All three liquidity ratios—current, quick, and cash—demonstrated an initial dip during 2020, likely reflecting stress or changes in working capital during that period. The recovery through 2021 and early 2023 signals improvement in liquidity and operational efficiency. However, the downward trend in all ratios from early 2023 through mid-2025 suggests a gradual tightening of liquidity, which may warrant ongoing monitoring to ensure adequate short-term financial stability.

The analysis of the quarterly financial data reveals several noteworthy trends in the short-term financial position.

Current Assets

The current assets show a general upward trajectory from the beginning of the period to the latest reported quarter. Starting at approximately 1,441,811 thousand US dollars, current assets increased steadily and consistently, reaching a peak exceeding 5,300,000 thousand US dollars in one of the latest quarters. Despite some minor fluctuations, the growth trend indicates an expansion in liquid and short-term resources available.

Current Liabilities

Current liabilities also exhibit a rising pattern over the reported quarters. Beginning around 734,374 thousand US dollars, liabilities surged notably, peaking above 2,870,000 thousand US dollars in later periods. Similar to current assets, liabilities increased fairly steadily but at a pace that somewhat parallels asset growth, suggesting the company has taken on more short-term obligations commensurate with its asset base expansion.

Current Ratio

The current ratio, representing the coverage of current liabilities by current assets, fluctuates in a relatively narrow band between approximately 1.57 and 2.04 throughout the reported periods. Initially, the current ratio declined from above 1.9 to near 1.57, indicating a reduction in liquidity coverage early on. However, it subsequently stabilized, hovering around values close to 1.7 to 1.9 in recent quarters. This stability suggests that despite increased absolute values of assets and liabilities, the firm maintained a relatively consistent short-term liquidity position.

Overall, the data suggest that the company experienced substantial growth in both current assets and current liabilities, with a maintained short-term liquidity level reflected by a stable current ratio. The proportional increase in assets and liabilities indicates balanced growth, though the slight downward trend in the current ratio towards the latest quarters may warrant monitoring to ensure ongoing liquidity sufficiency.

Total Quick Assets

The total quick assets show a general upward trend from March 2020 through September 2024, increasing from approximately $1.39 billion to a peak of around $5.25 billion in December 2024. There are periodic fluctuations, such as slight declines observed in March 2023 and March 2025, but overall, quick assets have grown significantly, indicating a strengthening liquidity position over the analyzed periods.

Current Liabilities

Current liabilities exhibit a correlated upward movement, rising from roughly $734 million in March 2020 to a high of approximately $2.87 billion in December 2024. Similar to total quick assets, current liabilities show some periodic increases and moderate declines, specifically around March 2023 and again towards June 2025. The growth rate of current liabilities is notable but generally remains lower in percentage terms relative to quick assets, suggesting a managed approach to short-term obligations.

Quick Ratio

The quick ratio fluctuates within a range from 1.5 to about 1.95 across the periods, demonstrating relative stability in liquidity ratios. The ratio starts at 1.9 in early 2020, declines to a low near 1.5 by the end of 2020, then gradually recovers and stabilizes around the 1.8 to 1.9 range through 2021 and 2022. Minor downward deviations occur entering 2024 and mid-2025, yet the quick ratio consistently remains above 1.5, indicating sufficient liquid assets to cover current liabilities. This stability in the quick ratio despite increasing asset and liability balances suggests a balanced liquidity management strategy over the analyzed timeframe.

Total Cash Assets

The total cash assets demonstrate a general upward trend from March 31, 2020, through June 30, 2024, increasing from approximately $445.8 million to a peak of around $1.73 billion. There are some fluctuations, notably a decrease during the last two recorded quarters (March 31, 2025, and June 30, 2025), with cash assets decreasing to roughly $1.74 billion and then $1.69 billion. Overall, the company appears to have strengthened its cash position significantly over this period, suggesting improved liquidity and financial flexibility.

Current Liabilities

Current liabilities exhibit an overall rising trend during the same timeframe, growing from around $734.4 million in March 2020 to approximately $2.95 billion by June 2025. The liabilities show steady increases, though with some periods of sharper growth, such as between December 2020 and December 2021, and again from the end of 2023 through mid-2025. This increase in current liabilities may indicate higher operational obligations or increased short-term financing.

Cash Ratio

The cash ratio, which measures the company’s ability to cover its current liabilities with cash and cash equivalents, fluctuates over the examined period but remains generally below 1. The ratio starts at 0.61 in March 2020, rises to a peak of 0.76 in June 2020, then declines to a low of 0.42 at the end of 2020. From 2021 through mid-2023, the cash ratio mostly stays within a 0.53 to 0.74 range, reflecting moderate liquidity relative to liabilities. During late 2023 to mid-2025, the ratio trends mostly downward, ending at 0.57 in June 2025, suggesting that despite growth in cash assets, current liabilities have increased at a faster pace, slightly weakening the company’s immediate liquidity coverage.

Summary

The financial data reveal that total cash assets have significantly increased over the five-year period, indicating enhanced cash reserves. However, current liabilities have increased at an even higher rate, leading to a generally declining cash ratio in the most recent periods. While the company maintains a cash ratio indicating some cushion to cover current liabilities with cash, the downward trend in this ratio suggests a need to monitor short-term liquidity risks carefully. The simultaneous increase in both cash assets and current liabilities likely reflects growth activities but also emphasizes the importance of effective cash management strategies.