Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Twitter Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
The analysis of the liquidity ratios over the observed quarterly periods reveals notable fluctuations and patterns in the company's short-term financial health.
- Current Ratio
-
This ratio exhibited significant variability across the quarters. Initially, it was exceptionally high, exceeding 10 in the early 2018 quarters. A marked decline followed through late 2018 into early 2019, reaching a low around 4.3 to 4.7. A substantial increase occurred mid-to-late 2019, peaking again above 9 in the final quarter of that year. The first half of 2020 saw the ratio rise further, peaking at nearly 12, suggesting strong liquidity. However, a sharp decrease ensued in the latter half of 2020, falling back to approximately 4.4. Starting in 2021 and continuing to mid-2022, the ratio demonstrated a gradual upward trend, rising from around 4.3 to above 7 by mid-2022. This indicates a recovering or strengthening current asset base relative to current liabilities over that period.
- Quick Ratio
-
The quick ratio generally mirrored the current ratio's movements but at slightly lower values, reflecting the exclusion of inventory from current assets. It remained high (close to or above 9) during the early quarters of 2018, dipped significantly through late 2018 and early 2019 to values near 4.2 to 4.6, and then experienced a strong rebound in late 2019. In 2020, it peaked around 11.7 in the first quarter before declining back to approximately 4.3 by the end of the year. From 2021 through mid-2022, the quick ratio gradually increased from below 4 to nearly 7, indicating a recovery in liquid assets excluding inventory.
- Cash Ratio
-
The cash ratio followed a similar pattern but remained consistently lower than both the current and quick ratios, as expected given its focus solely on cash and cash equivalents. Initially, it was around 8.5 to 9.5 in early 2018 but dropped sharply through late 2018 and early 2019 close to 4. A notable increase occurred mid-to-late 2019, with values reaching nearly 8. The ratio peaked at approximately 10.8 at the start of 2020 before declining to just below 4 by the end of 2020. From 2021 onward, the cash ratio showed a steady increase, reaching above 6 by mid-2022. This overall pattern suggests fluctuations in immediate cash availability, with a particularly strong liquidity position at the beginning of 2020 and subsequent normalization.
Overall, the liquidity ratios reveal considerable volatility over the examined period, with very high liquidity levels early in 2018 and early 2020, interspersed with significant declines mid-periods of 2019 and late 2020. The consistent increase in all three ratios throughout 2021 and into mid-2022 suggests an improving liquidity position, reflecting enhanced ability to cover current liabilities with available assets. This pattern might reflect changes in operational cash flows, financing activities, or working capital management strategies during these periods.
Current Ratio
Twitter Inc., current ratio calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Current assets | 7,273,581) | 7,476,068) | 7,918,370) | 8,649,234) | 9,728,141) | 9,863,742) | 8,637,108) | 8,589,579) | 8,495,287) | 8,467,579) | 7,620,075) | 6,624,451) | 7,512,783) | 7,255,785) | 7,111,036) | 6,719,760) | 6,540,504) | 5,409,235) | ||||||
| Current liabilities | 1,017,263) | 1,136,707) | 1,343,867) | 2,114,981) | 2,257,919) | 2,036,693) | 1,952,826) | 1,935,103) | 841,107) | 710,020) | 832,476) | 762,627) | 1,733,738) | 1,621,679) | 1,516,311) | 1,457,646) | 594,419) | 528,654) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Current ratio1 | 7.15 | 6.58 | 5.89 | 4.09 | 4.31 | 4.84 | 4.42 | 4.44 | 10.10 | 11.93 | 9.15 | 8.69 | 4.33 | 4.47 | 4.69 | 4.61 | 11.00 | 10.23 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 2.81 | 2.87 | 2.93 | 2.98 | 3.15 | 3.10 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 0.88 | 0.86 | 0.85 | 1.03 | 0.92 | 0.96 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 2.52 | 2.81 | 3.15 | 4.23 | 5.43 | 6.08 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 1.05 | 1.05 | 0.95 | 1.17 | 1.23 | 1.27 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 1.92 | 1.91 | 1.71 | 1.76 | 1.77 | 1.72 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 1.06 | 1.10 | 1.08 | 1.24 | 1.23 | 1.31 | 1.32 | 1.34 | 0.94 | 0.80 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= 7,273,581 ÷ 1,017,263 = 7.15
2 Click competitor name to see calculations.
- Current Assets
- The current assets show a generally increasing trend from March 2018 through June 2021, rising from approximately $5.4 billion to nearly $9.9 billion. This upward trajectory indicates a strengthening in the company’s short-term asset base over this period. However, after June 2021, a noticeable decline occurs in current assets, decreasing from around $9.7 billion to $7.3 billion by June 2022. This reduction suggests a contraction in liquid or short-term assets in the most recent periods.
- Current Liabilities
- Current liabilities exhibit significant fluctuations throughout the timeframe. Initially, liabilities rise moderately from about $529 million in March 2018 to $1.73 billion by June 2019. A sharp decrease follows, with liabilities dropping to roughly $763 million in September 2019, and then remaining relatively stable in the next quarters. Another spike happens in the second half of 2020, peaking over $2 billion at the end of 2020 and early 2021, before gradually declining to about $1 billion by June 2022. These variations suggest episodic changes in short-term obligations, potentially related to financing or operational adjustments.
- Current Ratio
- The current ratio demonstrates pronounced volatility over the periods observed. The ratio begins very high in early 2018, exceeding 10, indicating strong liquidity relative to liabilities. Following this, the ratio plunges to values around 4.5 in late 2018 and mid-2019, reflecting reduced coverage of liabilities by current assets. It then spikes again in late 2019 and early 2020, reaching nearly 12, before falling back to values near 4.4 through most of 2020. A moderate increasing trend is seen from late 2021 onward, climbing from just over 4 to above 7 by mid-2022. These oscillations in the current ratio reflect the underlying fluctuations seen in current assets and liabilities, indicating periods of both higher and lower short-term financial strength.
- Summary Insight
- Overall, the data reveals a company experiencing cycles of significant changes in liquidity and short-term financial structure. While current assets generally increased for several years, recent declines paired with fluctuating current liabilities have led to variable liquidity positions as indicated by the current ratio. The company’s ability to cover current obligations has seen periods of both robust and more constrained liquidity, suggesting potential shifts in operational needs, financing strategies, or working capital management over time.
Quick Ratio
Twitter Inc., quick ratio calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Cash and cash equivalents | 2,680,596) | 2,283,308) | 2,186,549) | 3,473,865) | 4,125,595) | 4,248,702) | 1,988,429) | 2,201,073) | 3,112,454) | 3,463,349) | 1,799,082) | 1,869,444) | 2,183,111) | 2,247,661) | 1,894,444) | 1,928,929) | 2,544,641) | 1,601,028) | ||||||
| Short-term investments | 3,440,147) | 3,978,645) | 4,207,133) | 3,937,447) | 4,481,468) | 4,557,585) | 5,483,873) | 5,479,974) | 4,653,560) | 4,207,315) | 4,839,970) | 3,946,940) | 4,503,427) | 4,212,231) | 4,314,957) | 4,027,614) | 3,116,474) | 2,927,803) | ||||||
| Accounts receivable, net of allowance for doubtful accounts | 972,591) | 948,142) | 1,217,404) | 1,014,208) | 954,265) | 850,075) | 1,041,743) | 747,548) | 600,777) | 656,377) | 850,184) | 684,186) | 719,904) | 684,220) | 788,700) | 621,943) | 614,944) | 611,840) | ||||||
| Total quick assets | 7,093,334) | 7,210,095) | 7,611,086) | 8,425,520) | 9,561,328) | 9,656,362) | 8,514,045) | 8,428,595) | 8,366,791) | 8,327,041) | 7,489,236) | 6,500,570) | 7,406,442) | 7,144,112) | 6,998,101) | 6,578,486) | 6,276,059) | 5,140,671) | ||||||
| Current liabilities | 1,017,263) | 1,136,707) | 1,343,867) | 2,114,981) | 2,257,919) | 2,036,693) | 1,952,826) | 1,935,103) | 841,107) | 710,020) | 832,476) | 762,627) | 1,733,738) | 1,621,679) | 1,516,311) | 1,457,646) | 594,419) | 528,654) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Quick ratio1 | 6.97 | 6.34 | 5.66 | 3.98 | 4.23 | 4.74 | 4.36 | 4.36 | 9.95 | 11.73 | 9.00 | 8.52 | 4.27 | 4.41 | 4.62 | 4.51 | 10.56 | 9.72 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 2.62 | 2.72 | 2.79 | 2.85 | 3.01 | 2.94 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 0.68 | 0.71 | 0.71 | 0.89 | 0.80 | 0.84 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 2.34 | 2.62 | 2.94 | 3.94 | 5.09 | 5.86 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 0.78 | 0.78 | 0.71 | 0.94 | 0.99 | 1.06 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 1.87 | 1.85 | 1.65 | 1.70 | 1.68 | 1.62 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 0.91 | 0.98 | 0.94 | 1.07 | 1.07 | 1.17 | 1.15 | 1.16 | 0.81 | 0.69 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 7,093,334 ÷ 1,017,263 = 6.97
2 Click competitor name to see calculations.
The analysis of the financial data over the given periods reveals several notable trends in liquidity and current liabilities.
- Total Quick Assets
- Total quick assets generally demonstrate an increasing trend from March 2018 to June 2021, rising from approximately $5.1 billion to a peak of around $9.7 billion. However, starting from the third quarter of 2021, there is a noticeable decline in quick assets, reaching about $7.1 billion by June 2022. This pattern suggests an initial accumulation of highly liquid assets followed by a reduction in the most recent quarters.
- Current Liabilities
- Current liabilities fluctuate significantly over the period. Beginning at roughly $529 million in March 2018, they increase notably to over $1.6 billion by the first quarter of 2019, then drop sharply in the third quarter of 2019 to around $763 million. The liabilities then oscillate with peaks in the third and fourth quarters of 2020 at approximately $1.9 billion, followed by decreases in 2021 and further declines in early 2022, settling near $1.0 billion by June 2022. These variations indicate periods of elevated short-term obligations interspersed with considerable reductions.
- Quick Ratio
- The quick ratio displays marked volatility. It begins very high at 9.72 in March 2018, rises to 10.56 in June 2018, then plunges to approximately 4.5 between September 2018 and March 2019. Subsequently, the ratio surges again, reaching values over 11.7 in March 2020, then falls to around 4.36 by the end of 2020. From 2021 onwards, the ratio fluctuates between approximately 3.98 and 6.97, with an upward trend in early 2022. This volatility reflects periodic fluctuations in the company's liquidity position relative to its current liabilities, suggesting varying capacity to cover short-term obligations with quick assets through the periods under review.
In summary, the period analyzed shows initial growth in liquid assets and fluctuating current liabilities, resulting in a volatile quick ratio. The decline in quick assets after mid-2021, combined with relatively lower current liabilities, indicates changes in asset composition or usage. The persistent fluctuations in the quick ratio highlight the company's varying liquidity management effectiveness over time.
Cash Ratio
Twitter Inc., cash ratio calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Cash and cash equivalents | 2,680,596) | 2,283,308) | 2,186,549) | 3,473,865) | 4,125,595) | 4,248,702) | 1,988,429) | 2,201,073) | 3,112,454) | 3,463,349) | 1,799,082) | 1,869,444) | 2,183,111) | 2,247,661) | 1,894,444) | 1,928,929) | 2,544,641) | 1,601,028) | ||||||
| Short-term investments | 3,440,147) | 3,978,645) | 4,207,133) | 3,937,447) | 4,481,468) | 4,557,585) | 5,483,873) | 5,479,974) | 4,653,560) | 4,207,315) | 4,839,970) | 3,946,940) | 4,503,427) | 4,212,231) | 4,314,957) | 4,027,614) | 3,116,474) | 2,927,803) | ||||||
| Total cash assets | 6,120,743) | 6,261,953) | 6,393,682) | 7,411,312) | 8,607,063) | 8,806,287) | 7,472,302) | 7,681,047) | 7,766,014) | 7,670,664) | 6,639,052) | 5,816,384) | 6,686,538) | 6,459,892) | 6,209,401) | 5,956,543) | 5,661,115) | 4,528,831) | ||||||
| Current liabilities | 1,017,263) | 1,136,707) | 1,343,867) | 2,114,981) | 2,257,919) | 2,036,693) | 1,952,826) | 1,935,103) | 841,107) | 710,020) | 832,476) | 762,627) | 1,733,738) | 1,621,679) | 1,516,311) | 1,457,646) | 594,419) | 528,654) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Cash ratio1 | 6.02 | 5.51 | 4.76 | 3.50 | 3.81 | 4.32 | 3.83 | 3.97 | 9.23 | 10.80 | 7.98 | 7.63 | 3.86 | 3.98 | 4.10 | 4.09 | 9.52 | 8.57 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 2.04 | 2.16 | 2.17 | 2.30 | 2.44 | 2.44 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 0.25 | 0.30 | 0.30 | 0.44 | 0.42 | 0.49 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 1.82 | 2.08 | 2.27 | 3.26 | 4.31 | 5.05 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 0.78 | 0.78 | 0.71 | 0.94 | 0.99 | 1.06 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.73 | 0.71 | 0.53 | 0.56 | 0.53 | 0.54 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 0.45 | 0.48 | 0.51 | 0.59 | 0.60 | 0.64 | 0.67 | 0.75 | 0.40 | 0.20 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 6,120,743 ÷ 1,017,263 = 6.02
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several important trends in liquidity and financial position over the observed periods.
- Total Cash Assets
- Total cash assets generally exhibited an upward trajectory from March 2018 through June 2019, increasing from approximately 4.5 billion USD to about 6.7 billion USD. However, in the subsequent quarters leading to the end of 2019, there was some fluctuation, including a notable decline in September 2019. Entering 2020, cash assets reached higher levels, peaking around 7.7 billion USD in June 2020 but then gradually decreased through 2021 and into mid-2022. By June 2022, cash assets had diminished to roughly 6.1 billion USD, indicating a moderate contraction in liquid resources compared to the earlier peak levels.
- Current Liabilities
- Current liabilities showed significant volatility during the period. Beginning at approximately 529 million USD in March 2018, liabilities escalated sharply by the third quarter of 2018, exceeding 1.4 billion USD and remaining elevated through the end of 2018 and into 2019. After a sharp reduction in the latter part of 2019, liabilities again surged markedly in late 2020, with values reaching nearly 2 billion USD in certain quarters. Following this peak, there has been a clear downward trend through 2021 and the first half of 2022, falling to slightly over 1 billion USD by June 2022. This pattern reflects periods of increased short-term obligations interspersed with phases of liability management and reduction.
- Cash Ratio
- The cash ratio, which measures the company's ability to cover current liabilities with cash assets, displayed considerable fluctuation across the quarters. Initially very high in early 2018 (above 8), the ratio plummeted in late 2018 to around 4, corresponding with the rise in current liabilities during that time. Subsequently, the ratio improved significantly toward the end of 2019 and early 2020, peaking near 10 in March 2020, indicating a strong liquidity position relative to short-term liabilities. Thereafter, the cash ratio declined again through late 2020 but stabilized around 3.5 to 4.3 during 2021. In 2022, the ratio improved once more, reaching over 6 by June, suggesting an enhanced ability to meet short-term obligations with liquid assets compared to the preceding years.
In summary, the company's cash assets have undergone periods of growth and contraction, while current liabilities have experienced marked variability, leading to fluctuating liquidity ratios. The cash ratio's movement suggests phases where liquidity was strong and periods where it weakened due to rising liabilities or reduced cash reserves. Most recently, an improvement in liquidity ratios indicates a stronger position to cover current liabilities with available cash.