eBay Inc. (NASDAQ:EBAY)

Current Ratio

The current ratio demonstrated a significant increase from 1.51 in 2014 to a peak of 3.49 in 2015, indicating a substantial improvement in short-term liquidity during that period. However, after 2015, the ratio declined steadily to 2.31 in 2016 and further to 2.19 in 2017, followed by a more pronounced drop to 1.6 in 2018. Despite the decrease after 2015, the ratio remained above the 2014 level, suggesting that the company maintained a generally strong ability to cover current liabilities with current assets over the five-year time frame.

Quick Ratio

The quick ratio followed a trend similar to the current ratio, starting at 1.43 in 2014 and rising sharply to 2.98 in 2015. This peak points to an improved ability to meet short-term obligations without relying on inventory sales. Post-2015, the quick ratio declined consistently to 2.01 in 2016, 1.85 in 2017, and further down to 1.26 in 2018. Despite this downward trend, the quick ratio in 2018 remained slightly below the initial 2014 figure, indicating a slight weakening in immediate liquidity.

Cash Ratio

The cash ratio exhibited a more variable pattern, increasing significantly from 0.58 in 2014 to 2.71 in 2015, indicating a strong liquidity position with cash and cash equivalents covering a large portion of current liabilities. After this peak, the cash ratio decreased steadily each year to 1.86 in 2016, 1.66 in 2017, and 1.10 in 2018. Although it declined, the ratio in 2018 remained notably higher than the 2014 value, suggesting a relatively strong cash position maintained throughout the period despite the downward trend.

Overall Analysis

The liquidity ratios reveal a clear pattern of peak liquidity in 2015, with all three ratios—current, quick, and cash—achieving their highest values during that year. Subsequent years show a gradual decline in liquidity ratios, indicating a normalization or reduction in the liquidity buffer. Despite this, the liquidity levels remained above or close to the initial 2014 levels by 2018, reflecting that the company maintained a generally healthy liquidity position throughout the period under review.

The financial data reveals notable fluctuations in current assets, current liabilities, and the current ratio over the examined five-year period.

Current Assets (US$ in millions)

There is a significant decline in current assets from 26,531 million in 2014 to 7,126 million in 2018. After a sharp drop between 2014 and 2015 to 7,904 million, the amounts slightly increased in 2016 at 8,875 million, followed by a gradual decrease again in 2017 and 2018. This indicates a substantial reduction in liquid and short-term assets available over these years.

Current Liabilities (US$ in millions)

Current liabilities declined markedly from 17,531 million in 2014 to 2,263 million in 2015, then gradually rose to 3,847 million in 2016 and 3,539 million in 2017, before increasing further to 4,454 million in 2018. Despite the initial drop, the upward trend from 2015 onward suggests an increase in short-term obligations following the initial reduction.

Current Ratio (ratio)

The current ratio improved significantly from 1.51 in 2014 to a peak of 3.49 in 2015, reflecting stronger liquidity and the company's improved capacity to cover current liabilities with current assets. However, the ratio subsequently declined to 2.31 in 2016, 2.19 in 2017, and further to 1.6 in 2018, indicating a gradual reduction in liquidity over the last three years. Despite this decline, the ratio remained above 1.0, suggesting continued ability to meet short-term obligations.

Overall, the data indicates a period of sharp contraction in both current assets and liabilities between 2014 and 2015, with current assets stabilizing at a lower level thereafter while liabilities gradually increased. The liquidity position, as measured by the current ratio, improved markedly initially but has weakened progressively since 2015, though it remains adequate by conventional standards.

Total Quick Assets

The total quick assets exhibited a notable decline overall, starting from a high point of 25,040 million USD in 2014 and decreasing sharply to 6,750 million USD in 2015. Afterwards, the amount fluctuated moderately, with values of 7,741 million in 2016, 6,558 million in 2017, and further declining to 5,627 million by the end of 2018. This pattern suggests a significant reduction in liquid assets available to cover short-term liabilities over the observed period.

Current Liabilities

Current liabilities decreased substantially from 17,531 million USD in 2014 to 2,263 million USD in 2015, indicating a major reduction in short-term obligations during that year. Following this, they gradually increased each year, reaching 3,847 million in 2016, 3,539 million in 2017, and rising further to 4,454 million in 2018. Despite these increases, the liability levels stayed well below the 2014 figure throughout the subsequent years.

Quick Ratio

The quick ratio demonstrated significant variability but a general downward trend after 2015. It started at 1.43 in 2014, almost doubled to 2.98 in 2015, reflecting strong liquidity, and then decreased to 2.01 in 2016, 1.85 in 2017, and 1.26 in 2018. The decline in the quick ratio after 2015 suggests a gradual weakening of the company's short-term liquidity position over the latter part of the period.

Overall Analysis

Overall, the data reveals a sharp contraction in both total quick assets and current liabilities from 2014 to 2015, with a stabilization and moderate fluctuations thereafter. The initial high liquidity indicated by the quick ratio peaked in 2015 but declined steadily after that, pointing to a gradual decrease in the company's ability to meet short-term obligations with its most liquid assets. The trend indicates increased caution in asset management and liability levels in the earlier years, followed by a period of moderate tightening of liquidity conditions.

Total Cash Assets

The total cash assets show a declining trend over the analyzed period. Beginning at 10,098 million US dollars at the end of 2014, there was a significant decrease to 6,131 million in 2015. The value slightly increased to 7,149 million in 2016 but then continued to decline to 5,863 million in 2017 and further to 4,915 million in 2018.

Current Liabilities

Current liabilities exhibit considerable variability. A notable sharp decrease occurred from 17,531 million US dollars in 2014 to 2,263 million in 2015. Following this, liabilities gradually increased each year, reaching 3,847 million in 2016, 3,539 million in 2017, and 4,454 million in 2018.

Cash Ratio

The cash ratio shows a highly volatile pattern. It rose dramatically from 0.58 at the end of 2014 to a peak of 2.71 in 2015, reflecting a strong liquidity position relative to current liabilities during that year. Afterward, the ratio gradually decreased to 1.86 in 2016, then 1.66 in 2017, and further down to 1.10 in 2018, indicating a weakening liquidity position over these years.

Overall Analysis

The data reveal a sharp reduction in both total cash assets and current liabilities between 2014 and 2015, which significantly impacted the cash ratio, raising it substantially in 2015. Subsequently, while cash assets declined steadily from 2016 to 2018, current liabilities increased moderately, resulting in a downward trend in the cash ratio. Despite this decline, the cash ratio remained above 1.0 in 2018, suggesting that cash assets still exceeded current liabilities, albeit by a smaller margin compared to previous years. These trends may indicate a shift in cash management or operational financing strategies over the period.