What Does Priceline’s Current Financial Health Signify?
- From the above analysis we can conclude that Priceline is in a sound financial state.
- Priceline’s cash asset ratio is almost 1, suggesting that the company will be able to pay off most of its near term obligations by using just its cash.
- The value of its assets that can be quickly converted to cash is more than double its short-term liabilities. Though this might indicate that Priceline has enough assets to amp up its investments, given Priceline’s acquisition trends over the last two years we can conclude that Priceline does invest in a timely and wise manner whenever it deems that the time is right. Additionally, it might also be possible that the company is gearing up for yet another takeover, soon.
- The solvency analysis shows Priceline is reliant on Debt to a great extent at 70% of Equity. Around 34% of its assets has been created using debt.
- The interest coverage ratio of 11.74 implies that Priceline can repay the current interests on its debts almost 12 times over with the help of its available earnings. This suggests that Priceline’s short-term financial health is in excellent shapeIn conclusion, going by its Q1 2016 financial figures, we can state that Priceline is currently in excellent financial health and the company might be gearing up for additional investments and strategic alliances. Given the dynamic nature of the online travel space, Priceline’s health suggests that it has significant ability to maintain its topmost position (in terms of revenues) in the online travel arena in the coming years.
Have more questions on Priceline? See the links below.
- What Is Priceline’s Fundamental Value On The Basis Of Its Forecasted 2015 Results?
- How Has Priceline’s Revenue And EBITDA Composition Changed Over 2012-2016E?
- What Is Priceline’s Revenue And EBITDA Breakdown?
- Top 3 U.S. OTAs: A Comparison Of Operating Margins
- How Has Priceline’s Stock Performed In The Last Five Years?
- What Drove Priceline’s Revenue And EBITDA Growth Over The Last Five Years?
- Where Can Priceline’s Growth Come From In The Next 5 Years?
- What Is Priceline’s Fundamental Value Based On 2016 Estimated Numbers?
- How Are Kayak And OpenTable Boosting Priceline’s Growth?
- Priceline Q1 2016 Earnings Preview
- Priceline Q1 2016 Earnings Takeaways
- How Did Priceline’s Different Segments Perform Over The Last Five Years?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Priceline
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