Analog Devices Inc. (NASDAQ:ADI)

Current Ratio

The current ratio exhibited fluctuations across the periods analyzed. Initially, it was moderately strong at 1.57, then decreased notably to a low of 1.05 in May 2021, indicating a tightening in short-term liquidity. Subsequently, a recovery started, reaching a peak of 2.12 by January 2023, reflecting improved ability to meet current liabilities with current assets. After this peak, there was a gradual decline, hitting 1.37 in October 2023, suggesting a temporary weakening. However, the ratio rebounded consistently thereafter, reaching 2.32 by August 2025, before slightly retreating to 2.19 in November 2025. Overall, the trend suggests that the company improved its liquidity position over time, with some periods of volatility.

Quick Ratio

The quick ratio followed a pattern broadly similar to the current ratio but generally remained lower, reflecting the exclusion of inventory from liquid assets. Starting at 1.12, it dropped sharply to 0.76 in May 2021, signaling a reduced capacity to cover immediate liabilities without relying on inventory. A recovery phase ensued, with the ratio increasing to 1.54 in January 2022, and then stabilizing around 1.34 to 1.36 throughout late 2022 and early 2023. Subsequently, another downward trend was apparent, reaching a low of 0.76 again in October 2023, indicating a temporary squeeze on liquid assets. Following this, a steady improvement took place, culminating at 1.69 in August 2025, followed by a slight decrease to 1.57 in November 2025. This indicates improved liquidity excluding inventory in the later periods after some earlier pressures.

Cash Ratio

The cash ratio demonstrated the most volatility and generally lower values, emphasizing the company's cash and cash equivalents relative to current liabilities. Initially at 0.63, it declined to a low of 0.30 by October 2023, implying constrained cash reserves relative to short-term obligations during this time frame. Thereafter, a marked recovery occurred, with the cash ratio steadily rising to reach a peak of 1.16 by August 2025. The ratio then slightly declined to 1.13 in November 2025 but remained above one, indicating a strong cash position relative to current liabilities at the end of the period. This recovery in the cash ratio after 2023 suggests a deliberate buildup of cash resources or improved cash management strategies.

The company's current assets exhibit a general upward trend over the observed periods, increasing from approximately 2,624,741 thousand US dollars to 7,108,061 thousand US dollars. There is notable volatility within the data, with a sharp rise occurring between July 2021 and October 2021, followed by a period of relative stability and moderate fluctuations thereafter. Despite these fluctuations, the overall trajectory remains positive, suggesting improved asset liquidity.

Current liabilities demonstrate a less consistent pattern, initially rising from 1,676,757 thousand US dollars to a peak around May 2021 through July 2021. Subsequent periods show oscillations with declines and increases, ultimately reaching approximately 3,245,801 thousand US dollars by November 2025. The variability indicates ongoing adjustments in short-term obligations, though there is a general increase in liabilities over the longer term.

The current ratio, which measures liquidity by comparing current assets to current liabilities, reflects these underlying movements. Starting at 1.57, the ratio dips to around 1.05 in May 2021, indicating tighter liquidity conditions, before rebounding sharply to about 1.94 in October 2021. Following this resurgence, the ratio fluctuates but maintains an upward trend, reaching a peak of roughly 2.32 in August 2025 and leveling slightly to 2.19 by November 2025. This improvement suggests enhanced short-term financial health and greater ability to cover current liabilities with current assets.

Overall, the company appears to have strengthened its liquidity position, supported by a significant increase in current assets outpacing the growth in current liabilities. However, the fluctuations in both assets and liabilities indicate variable operational or financial activities influencing working capital management across quarters.

Current Assets

Show a consistent upward trajectory with notable spikes and moderate fluctuations, indicating growing liquidity resources.

Current Liabilities

Exhibit variability and an overall rising trend, suggesting increasing short-term obligations with intermittent adjustments.

Current Ratio

Reflects improved liquidity conditions over time, with an initial dip followed by steady increases indicating enhanced capacity to meet short-term liabilities.

Trend in Total Quick Assets

Total quick assets show an overall increasing trend over the periods analyzed. The amount rose from approximately 1.88 billion US dollars in early 2021 to over 5.08 billion US dollars by late 2025. There is a noticeable dip in the middle of 2023, where quick assets decreased from a peak in early 2023 before recovering strongly through 2024 and 2025. This pattern suggests growth with some fluctuations, possibly reflecting changes in cash, marketable securities, or receivables availability.

Trend in Current Liabilities

Current liabilities exhibit substantial variability but generally remain within a range between approximately 1.68 billion and 3.24 billion US dollars. Starting at lower levels in 2021, liabilities peaked around the fourth quarter of 2023 and remained elevated through much of 2024. A moderate decline is observed towards early 2025, followed again by an increase by the end of the period covered. This variability indicates active management of short-term obligations or fluctuations in obligations such as accounts payable or short-term debt.

Quick Ratio Analysis

The quick ratio, an indicator of short-term liquidity, begins at 1.12 in early 2021 and experiences a decline below 1 during mid-2021, reaching a low of approximately 0.76 in late 2023. This suggests a weakening in liquidity against current liabilities during that timeframe. However, following this trough, the quick ratio improves steadily through 2024 and 2025, achieving a high of about 1.69 before slightly retreating to 1.57 by the last reporting period. This improvement implies an enhanced ability to cover current liabilities instantly with quick assets towards the end of the timeline.

Overall Financial Position Insights

The combination of rising total quick assets alongside fluctuating current liabilities and an improving quick ratio toward the end of the timeframe indicates strengthening liquidity and better short-term financial stability. Temporary declines in liquidity ratios signal periods of potential strain or investment, but the recovery trend suggests effective liquidity management. The scale of growth in quick assets relative to liabilities in the latter periods is a positive indication of increased financial resilience.

The analysis of the quarterly financial data reveals several key trends in the liquidity and short-term financial management of the company over the observed periods.

Total Cash Assets

Total cash assets exhibit a fluctuating yet overall upward trend with considerable volatility across quarters. Initially, cash assets increased from approximately 1.05 billion USD to nearly 1.98 billion USD over the first year. Following this peak, cash decreased to just above 958 million USD in late 2023, then showed a strong recovery and growth in subsequent periods reaching over 3.65 billion USD by late 2025. This pattern indicates phases of cash accumulation, utilization, and renewed liquidity buildup.

Current Liabilities

Current liabilities have remained relatively high and somewhat variable throughout the timeline. After an initial increase from around 1.68 billion USD to nearly 2.77 billion USD within the first year, liabilities stabilized in the range of approximately 2.22 billion to 3.20 billion USD, with the highest values occurring toward the end of 2023. Subsequently, current liabilities fluctuated but mostly trended slightly downward or stabilized around the 2.7 to 3.2 billion USD range by 2025. The level of current liabilities suggests persistent short-term obligations, with no clear long-term reduction.

Cash Ratio

The cash ratio, a measure of immediate liquidity, presents a dynamic pattern reflective of the interplay between cash assets and current liabilities. Initially, the ratio declined from 0.63 to as low as 0.3 by late 2023, indicating reduced immediate liquidity relative to liabilities. However, from early 2024 onward, a significant and sustained improvement is noted, with the cash ratio rising to exceed 1.1 by late 2025. This improvement suggests enhanced short-term financial strength and a greater ability to cover current liabilities with available cash.

In summary, the company's liquidity position experienced periods of tightening followed by substantial strengthening. The growing cash reserves towards the end of the observed period alongside a moderate stabilization or slight reduction in current liabilities contributed to improved liquidity ratios. This development points to an increasingly robust capacity to meet short-term obligations with cash, indicating prudent financial management aimed at strengthening the balance sheet liquidity over time.