Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
---|---|---|---|---|---|---|
Current ratio | ||||||
Quick ratio | ||||||
Cash ratio |
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
The analysis of liquidity ratios over the reviewed periods reveals notable fluctuations and trends in the company's short-term financial health and ability to meet its current obligations.
- Current Ratio
- The current ratio demonstrates an initial decline from 2.54 in 2020 to 2.02 in 2021, indicating a reduced margin of safety in covering current liabilities with current assets. However, this trend reverses in subsequent years, rising to 2.36 in 2022, 2.51 in 2023, and reaching 2.62 by the end of 2024. This upward trajectory suggests an improving liquidity position and enhanced capacity to cover short-term obligations over time.
- Quick Ratio
- The quick ratio mirrors a similar pattern to the current ratio but with generally lower values, reflecting a more conservative measure of liquidity excluding inventory. It decreases from 1.81 in 2020 to 1.49 in 2021, then gradually increases to 1.57 in 2022, 1.67 in 2023, before slightly declining to 1.66 in 2024. Despite minor fluctuations, the quick ratio remains above 1, indicating adequate liquid assets to cover immediate liabilities throughout the period.
- Cash Ratio
- The cash ratio, the most stringent liquidity metric, starts at 0.95 in 2020 and decreases to 0.85 in 2021. It recovers somewhat to 0.92 in 2022 but trends downward thereafter to 0.86 in 2023 and further to 0.70 in 2024. This declining trend suggests a reduction in cash and cash equivalents relative to current liabilities, potentially indicating a more conservative cash management strategy or increased reliance on other current assets for liquidity.
Overall, the liquidity position reflects resilience, with the current and quick ratios showing improvement after an initial decline, while the cash ratio exhibits a downward trend. This combination suggests the company maintains a balanced approach to liquidity, relying not solely on cash but also on other current assets to meet short-term obligations effectively.
Current Ratio
Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Current assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Current ratio1 | ||||||
Benchmarks | ||||||
Current Ratio, Competitors2 | ||||||
Analog Devices Inc. | ||||||
Applied Materials Inc. | ||||||
Broadcom Inc. | ||||||
Intel Corp. | ||||||
KLA Corp. | ||||||
Lam Research Corp. | ||||||
Micron Technology Inc. | ||||||
NVIDIA Corp. | ||||||
Qualcomm Inc. | ||||||
Texas Instruments Inc. | ||||||
Current Ratio, Sector | ||||||
Semiconductors & Semiconductor Equipment | ||||||
Current Ratio, Industry | ||||||
Information Technology |
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets have demonstrated consistent growth over the analyzed period, increasing from $6,143 million in 2020 to $19,049 million in 2024. This upward trend reflects a strengthening in the company's liquidity position and capacity to cover short-term obligations.
- Current Liabilities
- Current liabilities also increased steadily, from $2,417 million in 2020 to $7,281 million in 2024. Although liabilities are growing, the increase is less pronounced relative to current assets, which suggests an overall improvement in the company's short-term financial stability.
- Current Ratio
- The current ratio exhibits some variability but maintains a generally positive trajectory. Starting at 2.54 in 2020, it decreased to 2.02 in 2021, indicating a temporary contraction in liquidity. However, since 2021, the ratio has progressively increased to 2.62 in 2024, implying enhanced ability to meet short-term liabilities with current assets.
- Overall Analysis
- The data indicates that despite rising current liabilities, current assets have grown at a faster pace, leading to an improvement in the current ratio over the long term. The slight dip in liquidity in 2021 appears to be a temporary fluctuation. The company's increasing current ratio above 2 during the later years suggests a healthy liquidity position, providing a cushion to absorb potential short-term financial stresses.
Quick Ratio
Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Accounts receivable, net | ||||||
Receivables from related parties | ||||||
Unbilled receivables | ||||||
Total quick assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Quick ratio1 | ||||||
Benchmarks | ||||||
Quick Ratio, Competitors2 | ||||||
Analog Devices Inc. | ||||||
Applied Materials Inc. | ||||||
Broadcom Inc. | ||||||
Intel Corp. | ||||||
KLA Corp. | ||||||
Lam Research Corp. | ||||||
Micron Technology Inc. | ||||||
NVIDIA Corp. | ||||||
Qualcomm Inc. | ||||||
Texas Instruments Inc. | ||||||
Quick Ratio, Sector | ||||||
Semiconductors & Semiconductor Equipment | ||||||
Quick Ratio, Industry | ||||||
Information Technology |
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibited a consistent upward trend over the five-year period. Starting at $4,366 million in late 2020, the amount increased significantly to $6,316 million in 2021, followed by a more pronounced rise to $9,983 million in 2022. Growth continued, albeit at a slower pace, reaching $11,158 million in 2023 and $12,065 million by the end of 2024. This steady increase suggests strengthening liquidity over time.
- Current Liabilities
- Current liabilities also trended upward substantially during the period. From $2,417 million in 2020, liabilities rose sharply to $4,240 million in 2021 and continued climbing to $6,369 million in 2022. The increase persisted through 2023 and 2024, with liabilities reaching $6,689 million and $7,281 million respectively. The rising liabilities indicate growing short-term obligations alongside expanding asset levels.
- Quick Ratio
- The quick ratio displayed some fluctuation but maintained a generally stable range. It started at 1.81 in 2020, dropped to 1.49 in 2021, and then experienced a slight improvement to 1.57 in 2022. The ratio further increased to 1.67 in 2023 before marginally decreasing to 1.66 in 2024. Overall, the quick ratio remaining above 1.4 throughout suggests that liquid assets continued to cover current liabilities adequately despite rising liabilities.
- Overall Analysis
- The combined data indicate that both liquid assets and current liabilities have grown substantially over the observed period, reflecting the company’s expanding scale of operations or strategic financial positioning. The quick ratio's relative stability suggests that liquidity management has been effective in maintaining the capacity to meet short-term obligations, despite notable increases in current liabilities. The consistent rise in total quick assets likely contributes to sustaining this liquidity position.
Cash Ratio
Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Total cash assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Cash ratio1 | ||||||
Benchmarks | ||||||
Cash Ratio, Competitors2 | ||||||
Analog Devices Inc. | ||||||
Applied Materials Inc. | ||||||
Broadcom Inc. | ||||||
Intel Corp. | ||||||
KLA Corp. | ||||||
Lam Research Corp. | ||||||
Micron Technology Inc. | ||||||
NVIDIA Corp. | ||||||
Qualcomm Inc. | ||||||
Texas Instruments Inc. | ||||||
Cash Ratio, Sector | ||||||
Semiconductors & Semiconductor Equipment | ||||||
Cash Ratio, Industry | ||||||
Information Technology |
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets displayed an overall upward trend from 2020 to 2022, increasing from 2290 million USD to 5855 million USD. However, following 2022, the cash assets experienced a slight decline, dropping to 5773 million USD in 2023 and further to 5132 million USD in 2024. Despite the decline after 2022, the cash assets in 2024 remain significantly higher than the levels observed in 2020 and 2021.
- Current Liabilities
- Current liabilities demonstrated a consistent and marked increase throughout the period. Starting at 2417 million USD in 2020, liabilities rose sharply to 4240 million USD in 2021 and continued to grow substantially, reaching 6369 million USD in 2022, 6689 million USD in 2023, and culminating at 7281 million USD in 2024. This upward trajectory indicates increasing short-term obligations over the five-year span.
- Cash Ratio
- The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, revealed a declining trend over the years. It began at 0.95 in 2020, dipped to 0.85 in 2021, rose slightly to 0.92 in 2022, but then decreased again to 0.86 in 2023 and ultimately dropped to 0.7 by 2024. This decline suggests that despite strong cash asset levels, the increased current liabilities have outpaced cash reserves, reducing short-term liquidity coverage.
- Summary
- In summary, although total cash assets initially grew substantially, the increasing current liabilities have outstripped the growth in cash, resulting in a deteriorating cash ratio over the analyzed period. This pattern indicates rising short-term financial obligations that have not been fully matched by equivalent increases in immediately liquid assets, potentially signaling increased liquidity risk.