Meta vs Alphabet: can they still pay this year's bills?
Imagine your small shop brings in $100 and you spend $115 on new equipment. How do you still pay this month’s bills?
That is what Alphabet did in the second quarter of 2026. For every $100 of cash its business brought in, it spent $115.0 on capex, the money spent on buildings and equipment such as data centers and servers. Meta spent $94.5.
So can they still pay this year’s bills, and where did the money come from? Below are four checks on both companies at June 30, 2026, the same date for both, from their filings with the SEC. You can run the same checks on any company.
Video: Meta vs Alphabet on YouTube
Check 1: the current ratio
The current ratio answers a simple question: does the company have enough short-term assets to pay the bills due within a year? It is current assets divided by current liabilities, from the balance sheet. Current assets are cash and things that turn into cash within a year; current liabilities are the bills due within a year.
| Jun 30, 2026, $ billions | Meta | Alphabet |
|---|---|---|
| Current assets | 125.5 | 343.5 |
| Current liabilities | 56.4 | 126.1 |
| Current ratio, Jun 30, 2026 | 2.2× | 2.7× |
| Current ratio, Dec 31, 2025 | 2.6× | 2.0× |
From the end of 2025 to June 2026, Meta’s ratio went down, from 2.6 to 2.2. Alphabet’s went up, from 2.0 to 2.7.
Check 2: the cash ratio
The cash ratio asks a stricter question: could cash alone pay all of this year’s bills, without selling anything else? It is cash and marketable securities (investments the company can sell quickly) divided by current liabilities.
| Jun 30, 2026, $ billions | Meta | Alphabet |
|---|---|---|
| Cash and marketable securities | 90.3 | 242.5 |
| Current liabilities | 56.4 | 126.1 |
| Cash ratio, Jun 30, 2026 | 1.6× | 1.9× |
| Cash ratio, Dec 31, 2025 | 2.0× | 1.2× |
Above 1, cash alone could pay all of this year’s bills. Both are above 1. Again Meta went down and Alphabet went up: in six months, Alphabet’s cash and securities grew by $115.6 billion. The balance sheet does not say where that money came from. The cash flow statement does.
Check 3: free cash flow
Free cash flow answers: does the business itself bring in more cash than it spends on capex? It is operating cash flow minus capex. The two companies define it a little differently (Meta also subtracts some lease payments), so we use the same formula for both.
| Operating cash flow − capex, $ billions | Q1’25 | Q2’25 | Q3’25 | Q4’25 | Q1’26 | Q2’26 |
|---|---|---|---|---|---|---|
| Meta | 11.1 | 9.0 | 11.2 | 14.8 | 13.2 | 1.7 |
| Alphabet | 19.0 | 5.3 | 24.5 | 24.6 | 10.1 | −5.9 |
In the second quarter of 2026, capex took $94.5 of every $100 of operating cash at Meta. Its business still paid for its own spending, but only just. At Alphabet, capex took $115.0: the business did not cover its own capex. So it cannot explain Alphabet’s extra cash.
Check 4: new money
New money, also called external financing, answers: is the company paying for its spending with money from lenders and investors? It comes from the financing section of the cash flow statement. The money comes from outside the business in two ways: from lenders, as new debt, and from investors who buy new shares that the company itself sells.
| First half 2026, $ billions | Meta | Alphabet |
|---|---|---|
| Free cash flow (operating cash flow − capex) | 15.0 | 4.3 |
| New debt issued | 24.9 | 56.2 |
| New shares and preferred stock | 0 | 49.6 |
| Debt repaid | not shown | 5.3 |
| Buybacks | 0 | 0 |
| Buybacks, first half 2025 | 22.9 | 28.3 |
| Dividends | 2.7 | 5.2 |
In total, Alphabet raised $100.5 billion of new money in six months (net of the debt it repaid, from unrounded figures). Meta raised $24.9 billion of new debt. Neither bought back shares in the first half of 2026. Alphabet’s ratios improved mostly because of new money, not because of the business.
Rule: read the notes
Some large bills are not on the balance sheet yet. Commitments are contracts to buy goods or services in the future, already signed. Leases not yet started are rental contracts, already signed, that have not begun. They become liabilities only when the goods arrive or the lease starts.
| Jun 30, 2026, $ billions | Meta | Alphabet |
|---|---|---|
| Commitments | 349.3 | 707.0 |
| of which due in 2026 | 53.5 | not disclosed |
| of which due in 2027 | 81.7 | not disclosed |
| Commitments at Dec 31, 2025 | 131.0 | not shown |
| Leases not yet started | 279.0 | 85.2 |
Alphabet’s commitments are mostly long-term supply agreements, generally fulfilled through 2030. The two companies describe these numbers in different ways, so they are not directly comparable. What matters is that none of it is in current liabilities yet.
The four checks
| Check | Meta | Alphabet | What to look for |
|---|---|---|---|
| 1 · Current ratio (current assets ÷ current liabilities) | 2.2× | 2.7× | the trend, not one date |
| 2 · Cash ratio (cash and securities ÷ current liabilities) | 1.6× | 1.9× | above 1× = cash alone pays |
| 3 · Free cash flow, Q2 2026 (operating cash flow − capex) | +$1.7B | −$5.9B | quarter by quarter |
| 4 · New money, first half 2026 (net debt and shares raised) | $24.9B | $100.5B | who is paying for it |
At June 30, 2026, yes: at both, cash alone was bigger than the bills due within a year. But they got there in different ways. For the first two checks there is no official line between good and bad. S&P measures liquidity differently: the money a company will have over the next 12 months divided by the money it will need, where 1.2× is adequate, 1.5× strong and 2× exceptional. A ratio can look better just because the company raised new money, so always check where the cash comes from: from the business, or from lenders and investors.
Methodology
- Period: balance sheets at June 30, 2026 (Form 10-Q, Q2 2026) compared with December 31, 2025 (Form 10-K, FY2025), the same dates for both. Quarterly cash flows Q1 2025 to Q2 2026. Both fiscal years end on December 31.
- Sources: annual and quarterly reports (Form 10-K, 10-Q) and earnings releases (Form 8-K, Exhibit 99.1) of Meta Platforms, Inc. and Alphabet Inc., SEC EDGAR. Line items are taken from the filings, not from third-party data vendors.
- Current ratio = total current assets / total current liabilities. Cash ratio = (cash and cash equivalents + marketable securities) / total current liabilities.
- Free cash flow = net cash provided by operating activities − purchases of property and equipment (our calculation, non-GAAP). Meta’s own definition also subtracts principal payments on finance leases (Q2 2026: $0.8 billion); Alphabet’s is operating cash flow minus capital expenditures (Q2 2026: −$5.9 billion).
- New money, first half 2026: proceeds from debt issuance (net of issuance costs). Alphabet repaid $5.3 billion of debt (net new debt $51.0 billion) and issued $30.5 billion of common stock and $19.1 billion of mandatory convertible preferred stock.
- Commitments from the notes to the Q2 2026 Form 10-Q: Meta’s non-cancelable contractual commitments and leases signed but not yet commenced; Alphabet’s fixed or guaranteed purchase commitments, without a split by year, and leases not yet commenced. Definitions differ.
- Reference: no standard threshold exists for the current ratio or the cash ratio. S&P Global Ratings, “Methodology And Assumptions: Liquidity Descriptors For Global Corporate Issuers”: sources / uses over 12 months, 1.2× adequate, 1.5× strong, 2× exceptional. Not calculated here, because it needs forecasts.
- Rounding: figures are GAAP unless noted and rounded; totals are computed from unrounded figures.
- Corrections: if we find an error, we correct it here and say so.
Disclaimer
Educational and informational only. Not investment advice, not a recommendation to buy, sell or hold any security, and not an offer or solicitation. The analysis describes historical, publicly filed data; past results do not indicate future results. Verify against the original filings before relying on them.
One company case per episode, read from SEC filings. Free. No recommendations.