Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Axon Enterprise Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
- Current Ratio
- The current ratio demonstrated a generally strong liquidity position throughout the observed periods, starting at 3.46 in the first quarter of 2019 and peaking at 4.11 in the first quarter of 2021. A noticeable decline occurred after this peak, reaching a low of 2.44 in the first quarter of 2022. However, the ratio recovered steadily afterward, rising to 3.33 by the first quarter of 2023. This pattern suggests that while short-term liquidity was consistently robust, some tightening occurred in 2021-2022 before an improvement in early 2023.
- Quick Ratio
- The quick ratio trends closely mirrored those of the current ratio, indicating strong liquid asset coverage for current liabilities over the period. It began at 2.92 in early 2019, increased to a high of 3.26 in the first quarter of 2021, then declined substantially to a low of 1.72 in the second quarter of 2022. A gradual recovery ensued, with the ratio climbing to 2.39 by the first quarter of 2023. The sharper dip compared to the current ratio indicates a relatively larger decrease in highly liquid assets excluding inventories during the 2021-2022 period.
- Cash Ratio
- The cash ratio showed greater volatility and a declining trend relative to the other liquidity measures. Beginning at 2.01 in the first quarter of 2019, it rose to 2.48 by the first quarter of 2021, then rapidly dropped to a low of 0.87 in the third quarter of 2022. This was followed by a pronounced recovery to 1.77 by the first quarter of 2023. This behavior suggests that while cash and cash equivalents were initially abundant relative to current liabilities, the company reduced its cash reserves significantly during 2021-2022 before replenishing them somewhat in the subsequent quarters.
- Overall Liquidity Analysis
- Throughout the observed timeframe, liquidity ratios reflect a pattern of strong liquidity with a notable contraction phase during 2021-2022, especially in highly liquid assets and cash reserves. The subsequent recovery across all three ratios by early 2023 indicates an improvement in liquidity management or cash flow conditions. The differences in the magnitudes of fluctuations among the ratios imply changes in the composition of current assets, with cash and equivalents being more variable than other current assets.
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Current Ratio
Axon Enterprise Inc., current ratio calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current assets | 2,052,696) | 1,805,278) | 1,205,699) | 1,169,791) | 1,146,117) | 1,109,490) | 1,123,820) | 1,080,930) | 986,229) | 981,952) | 875,853) | 885,724) | 618,741) | 619,091) | 576,022) | 575,055) | 566,922) | ||||||
| Current liabilities | 616,127) | 602,646) | 431,523) | 432,971) | 470,679) | 418,521) | 379,890) | 272,871) | 239,775) | 256,331) | 258,555) | 242,830) | 195,015) | 195,566) | 183,834) | 163,673) | 163,794) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Current ratio1 | 3.33 | 3.00 | 2.79 | 2.70 | 2.44 | 2.65 | 2.96 | 3.96 | 4.11 | 3.83 | 3.39 | 3.65 | 3.17 | 3.17 | 3.13 | 3.51 | 3.46 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | 1.16 | 1.22 | 1.22 | 1.25 | 1.30 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 1.43 | 1.39 | 1.41 | 1.45 | 1.44 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 1.50 | 1.38 | 1.28 | 0.97 | 0.99 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 1.25 | 1.16 | 1.10 | 1.13 | 1.19 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 1.26 | 1.25 | 1.24 | 1.20 | 1.21 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 1.30 | 1.32 | 1.28 | 1.27 | 1.27 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 1.13 | 1.09 | 1.09 | 1.10 | 1.16 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= 2,052,696 ÷ 616,127 = 3.33
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable trends in the company's liquidity position over the reported periods.
- Current Assets
- The current assets exhibit a general upward trend from approximately $567 million at the end of Q1 2019 to about $2.05 billion by the end of Q1 2023. Noteworthy is the significant increase beginning in mid-2020, where the figure rose sharply from around $619 million in Q4 2019 to nearly $982 million by Q4 2020, and then continued a steady climb through 2021 and 2022, with a marked surge in Q4 2022 and Q1 2023.
- Current Liabilities
- Current liabilities also increased over the period, starting from roughly $164 million in Q1 2019 to approximately $616 million in Q1 2023. Similar to current assets, liabilities experienced sharper growth spikes around mid-2020 and again in late 2021 to early 2023. The steepest incremental rises appear between Q2 and Q4 2021, as well as from Q3 2022 onward.
- Current Ratio
- The current ratio, an indicator of short-term liquidity, shows fluctuation but generally remains above the threshold of 2.0, suggesting the company maintained reasonable liquidity throughout the time frame. Beginning at 3.46 in Q1 2019, it peaked at 3.96 in Q2 2021 and then dipped to a low of 2.44 in Q1 2022. Subsequently, the ratio recovered and trended upward again, reaching 3.33 by Q1 2023. These movements correspond with variations in current asset and liability levels, reflecting changes in the company's ability to cover short-term obligations.
Overall, the company’s liquidity position strengthened substantially over the observed period, driven by significant growth in current assets that outpaced increases in current liabilities. The current ratio remained comfortably above 2.0, indicating a solid buffer to meet short-term liabilities despite some periods of tightening liquidity. The observed sharp rises in assets and liabilities in the latter years may suggest expansion activities, increased operational scale, or changes in working capital management that warrant further investigation for underlying causes.
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Quick Ratio
Axon Enterprise Inc., quick ratio calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Cash and cash equivalents | 263,414) | 353,684) | 147,711) | 212,815) | 386,367) | 356,332) | 281,691) | 266,372) | 154,822) | 155,440) | 176,000) | 319,253) | 156,540) | 172,250) | 202,551) | 219,720) | 223,642) | ||||||
| Marketable securities | 54,810) | 39,240) | 35,280) | 45,900) | 57,600) | 72,180) | 83,340) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Short-term investments | 775,129) | 581,769) | 194,627) | 118,514) | 20,024) | 14,510) | 216,557) | 388,895) | 440,842) | 406,525) | 330,914) | 237,980) | 188,673) | 178,534) | 108,913) | 116,629) | 105,312) | ||||||
| Accounts and notes receivable, net of allowance | 379,887) | 358,190) | 418,308) | 379,672) | 344,907) | 320,819) | 265,267) | 201,907) | 185,373) | 229,201) | 172,803) | 154,253) | 147,945) | 146,878) | 149,013) | 134,630) | 149,096) | ||||||
| Total quick assets | 1,473,240) | 1,332,883) | 795,926) | 756,901) | 808,898) | 763,841) | 846,855) | 857,174) | 781,037) | 791,166) | 679,717) | 711,486) | 493,158) | 497,662) | 460,477) | 470,979) | 478,050) | ||||||
| Current liabilities | 616,127) | 602,646) | 431,523) | 432,971) | 470,679) | 418,521) | 379,890) | 272,871) | 239,775) | 256,331) | 258,555) | 242,830) | 195,015) | 195,566) | 183,834) | 163,673) | 163,794) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Quick ratio1 | 2.39 | 2.21 | 1.84 | 1.75 | 1.72 | 1.83 | 2.23 | 3.14 | 3.26 | 3.09 | 2.63 | 2.93 | 2.53 | 2.54 | 2.50 | 2.88 | 2.92 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | 0.29 | 0.32 | 0.29 | 0.28 | 0.29 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 0.79 | 0.79 | 0.78 | 0.81 | 0.84 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 0.78 | 0.73 | 0.65 | 0.50 | 0.51 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 0.86 | 0.81 | 0.73 | 0.75 | 0.82 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 0.84 | 0.88 | 0.85 | 0.82 | 0.84 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 1.07 | 1.09 | 1.06 | 1.03 | 1.03 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 0.71 | 0.69 | 0.70 | 0.71 | 0.76 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 1,473,240 ÷ 616,127 = 2.39
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends in the company's liquidity position over the observed period.
- Total Quick Assets
- Total quick assets showed relative stability with minor fluctuations from March 2019 through March 2021, ranging between approximately $460 million and $857 million. There was a significant increase beginning in the second quarter of 2020, peaking notably in the first quarter of 2023 at about $1.47 billion. This upward trend suggests enhanced liquid asset holdings toward the end of the observed period.
- Current Liabilities
- Current liabilities increased steadily over the quarters, rising from roughly $164 million in March 2019 to over $616 million by March 2023. Although there were some periods of slower growth or slight decreases, the general trend reflects heightened short-term obligations, particularly accelerating after mid-2021.
- Quick Ratio
- The quick ratio initially decreased from 2.92 in March 2019 to a low of 1.72 by June 2022, indicating a decline in the company's ability to cover current liabilities with its most liquid assets during that timeframe. Subsequently, the quick ratio reversed its decline, improving to 2.39 by March 2023. This recovery suggests a strengthening liquidity position in more recent quarters.
Overall, the data demonstrate that despite rising current liabilities, the company increased its total quick assets substantially toward the end of the period, leading to an improved quick ratio. The initial downward trend in liquidity ratios through mid-2022 indicates a period of tightening short-term financial flexibility, which was followed by a notable improvement by early 2023. This pattern may reflect strategic actions to enhance liquid asset reserves or manage liabilities more effectively, thereby improving the company’s short-term financial health.
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Cash Ratio
Axon Enterprise Inc., cash ratio calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Cash and cash equivalents | 263,414) | 353,684) | 147,711) | 212,815) | 386,367) | 356,332) | 281,691) | 266,372) | 154,822) | 155,440) | 176,000) | 319,253) | 156,540) | 172,250) | 202,551) | 219,720) | 223,642) | ||||||
| Marketable securities | 54,810) | 39,240) | 35,280) | 45,900) | 57,600) | 72,180) | 83,340) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Short-term investments | 775,129) | 581,769) | 194,627) | 118,514) | 20,024) | 14,510) | 216,557) | 388,895) | 440,842) | 406,525) | 330,914) | 237,980) | 188,673) | 178,534) | 108,913) | 116,629) | 105,312) | ||||||
| Total cash assets | 1,093,353) | 974,693) | 377,618) | 377,229) | 463,991) | 443,022) | 581,588) | 655,267) | 595,664) | 561,965) | 506,914) | 557,233) | 345,213) | 350,784) | 311,464) | 336,349) | 328,954) | ||||||
| Current liabilities | 616,127) | 602,646) | 431,523) | 432,971) | 470,679) | 418,521) | 379,890) | 272,871) | 239,775) | 256,331) | 258,555) | 242,830) | 195,015) | 195,566) | 183,834) | 163,673) | 163,794) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Cash ratio1 | 1.77 | 1.62 | 0.88 | 0.87 | 0.99 | 1.06 | 1.53 | 2.40 | 2.48 | 2.19 | 1.96 | 2.29 | 1.77 | 1.79 | 1.69 | 2.06 | 2.01 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | 0.16 | 0.19 | 0.16 | 0.14 | 0.15 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 0.21 | 0.22 | 0.21 | 0.21 | 0.22 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eaton Corp. plc | 0.09 | 0.09 | 0.08 | 0.07 | 0.06 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| GE Aerospace | 0.52 | 0.44 | 0.35 | 0.37 | 0.44 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Honeywell International Inc. | 0.40 | 0.51 | 0.44 | 0.43 | 0.49 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lockheed Martin Corp. | 0.14 | 0.16 | 0.15 | 0.11 | 0.12 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| RTX Corp. | 0.15 | 0.16 | 0.14 | 0.13 | 0.17 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 1,093,353 ÷ 616,127 = 1.77
2 Click competitor name to see calculations.
- Cash Assets Trend
- The total cash assets demonstrated notable fluctuations over the analyzed quarters. Starting at approximately $329 million in early 2019, there was a general upward trend toward mid-2020, peaking near $562 million by the end of that year. This was followed by some volatility throughout 2021 and early 2022, with values decreasing and fluctuating mostly between $377 million and $596 million. From the end of 2022 through the first quarter of 2023, a significant increase occurred, pushing cash assets to over $1 billion, nearly tripling from the previous low.
- Current Liabilities Trend
- Current liabilities followed a gradual increasing trend throughout the period studied. Starting just below $164 million at the beginning of 2019, liabilities rose steadily with some acceleration in 2021. By the first quarter of 2023, current liabilities had almost quadrupled, reaching over $616 million. This steady increase indicates a consistent rise in short-term obligations during the timeframe.
- Cash Ratio Analysis
- The cash ratio exhibited a declining trend from over 2.0 in early 2019 to below 1.0 during much of 2021 and mid-2022, suggesting a decreasing liquidity cushion relative to current liabilities. The ratio peaked early and mid-2020 around 2.29 and 2.19, correlating with increased cash assets. However, the trough in late 2021 with a ratio of approximately 1.06 and even lower values around 0.87 in mid-2022 reflects tighter liquidity. In the latter part of 2022 and early 2023, the ratio rebounded significantly, reaching 1.77 by the end of the first quarter of 2023, indicating an improvement in liquidity supported by the surge in cash assets despite rising liabilities.
- Overall Insights
- The company experienced substantial growth in cash resources returning to a strong liquidity position by early 2023 after a period of diminished liquidity in 2021 and 2022. The consistent rise in current liabilities suggests increased operational or financial activity requiring more short-term funding. The interplay between cash assets and liabilities resulted in fluctuating liquidity levels over time, with recent trends pointing to enhanced cash coverage relative to liabilities. This improvement in the cash ratio, combined with robust cash reserves, reflects strengthened capacity to meet short-term obligations.
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