Advanced Micro Devices Inc. (NASDAQ:AMD)

Current Ratio

The current ratio exhibits moderate fluctuations over the observed periods. Starting at 2.51, it experienced a peak at 2.7 in mid-2021 before declining towards the end of 2021. From early 2022 onwards, the ratio generally maintained values above 2.0, showing some recovery and peaking again at 2.82 by mid-2024. In the most recent quarters, a slight downtrend is observed, settling around 2.31 by late 2025. Overall, the current ratio remains consistently above 2, indicating a stable ability to cover short-term liabilities with current assets.

Quick Ratio

The quick ratio follows a pattern similar to the current ratio but with generally lower values, reflecting the exclusion of inventory from current assets. It started at 1.85 and rose to 2.01 in mid-2021, then declined to a low of 1.4 by mid-2023. A moderate recovery is noted in 2023 and early 2024, peaking near 1.79. However, the ratio declines in the latter part of the examined timeline, dropping to approximately 1.12-1.15 by late 2025. This trend suggests some tightening of more liquid assets relative to current liabilities, though it remains above 1 for most periods, indicating reasonable liquidity.

Cash Ratio

The cash ratio, reflecting immediate liquidity via cash and cash equivalents, shows more volatility and a generally lower level compared to the other liquidity ratios. Initial values are around 1.09, rising to 1.31, then trending downward with intermittent recoveries. Since 2023, the ratio mostly remains below 1, reaching as low as 0.6 by late 2025. This decreasing trend implies a reduced buffer of cash reserves to cover current liabilities immediately, potentially indicating a strategic use of cash or reliance on other current assets for liquidity.

Summary of Liquidity Trends

Overall, liquidity indicators demonstrate that while the company maintains solid short-term financial health with current ratios consistently above 2, there is a slight diminution in the most liquid components, as indicated by the downward trends in quick and cash ratios in later periods. This could reflect changes in working capital management, investment in inventory, or shifting cash management strategies. Despite these movements, the financial stance in terms of liquidity remains robust through the timeline analyzed.

Current Assets

The current assets have demonstrated a consistent upward trend across the analyzed periods. Starting from approximately $7.2 billion in early 2021, current assets increased steadily, reaching around $27 billion by late 2025. This growth reflects an approximate 275% increase over the span of nearly five years, indicating sustained accumulation of liquid and short-term assets which may enhance the company's liquidity position.

Current Liabilities

Current liabilities also increased over the periods but with more fluctuations compared to current assets. From roughly $2.9 billion in the first quarter of 2021, current liabilities climbed to $11.7 billion by the end of the data series in 2025. Although the increase in liabilities is significant, the rate of growth is lower relative to current assets, suggesting potential improvement in managing short-term obligations.

Current Ratio

The current ratio, representing the relationship between current assets and current liabilities, exhibits some variability but generally remains above 2.0 throughout the periods. Starting at 2.51 in early 2021, it experienced slight declines and recoveries, peaking around 2.82 in mid-2024 before declining to approximately 2.31 by late 2025. The overall level of the current ratio well above 1 indicates that the company maintains a strong liquidity position, consistently having more than twice the current assets compared to current liabilities.

Summary of Financial Liquidity Trends

The data reflects a company with steadily growing current assets and increasing current liabilities, though current assets grow at a faster pace. The current ratio suggests strong and stable liquidity management, as the company maintains ample current assets to cover its obligations. Slight fluctuations in the current ratio indicate responsiveness to varying operational and market conditions, but no indication of liquidity stress is observed. Overall, the trends denote a healthy short-term financial position with increasing resource availability relative to commitments.

Total quick assets

The total quick assets demonstrated an overall increasing trend with some fluctuations across the periods. Starting from approximately $5.3 billion in the first quarter of 2021, they surged to over $10 billion by the first quarter of 2022, indicating significant growth in highly liquid assets. After this rapid rise, the quick assets remained relatively stable, oscillating around $10 billion to $11 billion, before showing renewed accumulation towards the end of the data series, reaching about $13.4 billion by the third quarter of 2025.

Current liabilities

Current liabilities exhibited a consistent upward trajectory over the observed periods. Beginning near $2.9 billion in early 2021, liabilities increased steadily, peaking at $11.7 billion by the third quarter of 2025. This growth indicates the company took on increasing short-term obligations, with notable accelerations in mid to late 2024 and continuing into 2025. The rise in liabilities was sharper than the growth observed in quick assets, particularly in the later periods.

Quick ratio

The quick ratio, representing the liquidity position by comparing quick assets to current liabilities, showed variability but maintained values generally above 1 for most periods. It started relatively strong at 1.85 in early 2021, experienced a dip to around 1.4 to 1.5 in 2021 and early 2022, then recovered to peak near 1.79 in mid-2024. However, a decline occurred towards the end of the series, with ratios dropping to approximately 1.12 and 1.15 in mid and late 2025 respectively. This decrease suggests a relative tightening in liquidity, as current liabilities increased more rapidly than quick assets, potentially signaling increased short-term financial risk or more aggressive financing strategies.

Summary insights

Overall, the financial data outlines a company growing its liquid asset base significantly up to 2022, followed by a period of stability and modest growth. Meanwhile, current liabilities increased at a faster pace, especially in the latest quarters, placing downward pressure on the quick ratio. This implies that while the company maintains a liquidity buffer above 1, the margin has narrowed in recent periods, highlighting the importance of monitoring short-term obligations versus readily available liquid assets to sustain operational flexibility and meet immediate financial commitments.

The analysis of the quarterly financial data reveals several key trends regarding liquidity and short-term financial health over the periods examined.

Total Cash Assets

Total cash assets display fluctuating levels across the quarters. Beginning at $3,116 million in the earliest period, cash assets rose to a peak near $6,532 million around March 2022, indicating a significant increase in available liquid resources. After this peak, there is a general downward trend with intermittent recoveries, falling to around $4,544 million by September 2024 before increasing again to approximately $7,243 million by September 2025. The data suggests cyclical changes in cash levels, possibly reflecting operational cycles or strategic cash management.

Current Liabilities

Current liabilities have shown a persistent upward trend over time, starting at $2,864 million and increasing steadily through the periods to reach $11,700 million by September 2025. The rise in current liabilities is consistent and outpaces the growth in cash assets, which may point to increasing short-term obligations or greater operational scale requiring more immediate funding.

Cash Ratio

The cash ratio, which measures the company's ability to cover current liabilities with cash assets, generally trends downward. Initial values above 1.0 indicate a strong liquidity position, peaking at 1.31 in mid-2021. However, from late 2021 onward, the ratio mostly remains below 1.0, with several quarters falling below 0.7. By the last periods, cash ratios declined to around 0.6, underscoring a weaker liquidity position relative to current liabilities. This decline suggests a potential tightening in short-term financial flexibility.

Overall, while the company managed to accumulate substantial cash reserves in certain periods, the steady increase in current liabilities combined with a declining cash ratio highlights mounting short-term financial pressures. The pattern indicates that despite cash asset fluctuations, the company may face challenges in meeting short-term obligations solely with cash, reflecting a need for careful liquidity management going forward.