Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Income Statement
- Statement of Comprehensive Income
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2013
- Return on Assets (ROA) since 2013
- Analysis of Debt
- Aggregate Accruals
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Liquidity Ratios (Summary)
Twitter Inc., liquidity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Current ratio
- The current ratio exhibits a fluctuating pattern over the five-year period. Starting very high at 9.12 in 2017, it sharply decreased to 4.69 in 2018. In 2019, the ratio rebounded close to its initial level at 9.15, but again declined to 4.42 in 2020 before recovering moderately to 5.89 in 2021. This suggests variability in the company's ability to cover short-term liabilities with current assets, demonstrating periods of both strong liquidity and relatively lower short-term financial coverage.
- Quick ratio
- The quick ratio follows a similar trend to the current ratio, starting at 8.69 in 2017 and sharply dropping to 4.62 in 2018. It then peaks at 9 in 2019 before decreasing again to 4.36 in 2020 and rising to 5.66 in 2021. The parallel trend indicates consistent changes in the company’s liquid assets excluding inventory, reflecting corresponding fluctuations in near-cash assets' ability to meet current liabilities.
- Cash ratio
- The cash ratio also shows a recurring pattern of rises and falls. From a high of 7.55 in 2017, it declines to 4.10 in 2018, then increases again to 7.98 in 2019. Following that, it decreases to 3.83 in 2020, before improving somewhat to 4.76 in 2021. This trend points to significant variability in the company’s cash and cash equivalents relative to current liabilities, indicating changes in the most liquid resources available for immediate obligations.
Current Ratio
Twitter Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Current Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| Current Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- There is an overall increasing trend in current assets from 2017 through 2020, rising from 5,321,884 thousand USD to a peak of 8,637,108 thousand USD. However, in 2021, current assets decreased to 7,918,370 thousand USD, indicating a slight decline after several years of growth.
- Current Liabilities
- Current liabilities fluctuated significantly over the period. Starting at 583,278 thousand USD in 2017, they increased sharply to 1,516,311 thousand USD in 2018, then decreased markedly to 832,476 thousand USD in 2019. Subsequently, liabilities rose again to 1,952,826 thousand USD in 2020 before falling to 1,343,867 thousand USD in 2021. This pattern suggests volatility in short-term obligations.
- Current Ratio
- The current ratio shows a fluctuating but generally strong liquidity position. It was especially high in 2017 and 2019, exceeding 9 times, which indicates a robust ability to cover short-term liabilities with current assets during those years. In 2018 and 2020, the ratio dropped to around 4.5, showing a relative decrease in liquidity. In 2021, the current ratio improved to 5.89, suggesting better short-term financial health compared to the preceding year but still lower than the earlier peaks.
Quick Ratio
Twitter Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Accounts receivable, net of allowance for doubtful accounts | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Quick Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| Quick Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Trend in Total Quick Assets
- The total quick assets demonstrated an overall upward trend from 2017 through 2020, increasing from approximately 5,067,370 thousand US dollars at the end of 2017 to about 8,514,045 thousand US dollars by the end of 2020. However, in 2021, a slight decline was observed, with total quick assets decreasing to 7,611,086 thousand US dollars. This indicates a general strengthening of liquid assets over the initial four years, followed by a modest reduction in the final year analyzed.
- Changes in Current Liabilities
- Current liabilities fluctuated significantly over the period. They started at 583,278 thousand US dollars in 2017, increased sharply to 1,516,311 thousand US dollars in 2018, then decreased to 832,476 thousand US dollars in 2019. A notable surge occurred again in 2020, reaching 1,952,826 thousand US dollars, followed by a reduction to 1,343,867 thousand US dollars in 2021. These fluctuations suggest variability in short-term obligations, with peaks in 2018 and 2020.
- Quick Ratio Analysis
- The quick ratio exhibited considerable volatility during the period. Beginning at a high level of 8.69 in 2017, the ratio decreased to 4.62 in 2018. It rose sharply to 9.00 in 2019, then fell again to 4.36 in 2020 before increasing to 5.66 in 2021. These variations reflect changes in the company's liquidity position relative to its current liabilities. Despite the fluctuations, the ratio remained above 1 throughout, indicating that quick assets consistently exceeded current liabilities, thereby maintaining adequate liquidity.
- Overall Financial Position
- The data reveals a pattern of increasing quick assets over most years, coupled with significant variability in current liabilities. While the quick ratio fluctuated, it consistently remained at levels suggestive of a strong liquidity position. The peaks in current liabilities correspond with reductions in the quick ratio, indicating periods where liquidity was relatively tighter but still sufficient.
Cash Ratio
Twitter Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Cash Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| Cash Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- Over the five-year period, total cash assets exhibited a general upward trend from 4,403,102 thousand US dollars in 2017 to a peak of 7,472,302 thousand US dollars in 2020. However, there was a decline to 6,393,682 thousand US dollars in 2021, indicating a reduction in available cash resources compared to the previous year.
- Current liabilities
- Current liabilities fluctuated during the period, starting at 583,278 thousand US dollars in 2017, sharply increasing to 1,516,311 thousand US dollars in 2018. There was a decline in 2019 to 832,476 thousand US dollars, followed by a significant increase reaching 1,952,826 thousand US dollars in 2020. In 2021, current liabilities decreased to 1,343,867 thousand US dollars. This pattern suggests variability in short-term obligations, with notable volatility in recent years.
- Cash ratio
- The cash ratio demonstrated considerable fluctuations throughout the years. It started at a high level of 7.55 in 2017, then dropped to 4.1 in 2018. The ratio peaked again in 2019 at 7.98 but declined sharply to 3.83 in 2020. A moderate recovery to 4.76 occurred in 2021. These changes reflect shifts in liquidity, indicating varying levels of cash relative to current liabilities over time.