Broadcom Inc. (NASDAQ:AVGO)

The liquidity position, as indicated by the current, quick, and cash ratios, demonstrates a notable shift over the observed period. Initially, from January 31, 2021, through October 30, 2022, all three ratios generally trended upwards, suggesting improving short-term solvency. However, a distinct decline in liquidity is evident beginning with the January 29, 2023, reporting period, continuing through May 5, 2024. A subsequent partial recovery is observed in the latter periods, though ratios generally remain below the levels seen in the earlier part of the analyzed timeframe.

Current Ratio

The current ratio began at 2.14 and increased to a peak of 2.82 by October 29, 2023. Following this peak, a substantial decrease occurred, falling to 1.33 by January 29, 2023, and reaching a low of 1.04 by May 5, 2024. The ratio then exhibits a recovery, rising to 1.90 by February 1, 2026. This pattern suggests fluctuations in the company’s ability to cover short-term liabilities with its short-term assets.

Quick Ratio

Mirroring the current ratio, the quick ratio also showed an initial upward trend, increasing from 1.80 to 2.34. A similar decline is observed starting in January 2023, with the ratio dropping to 0.83. A recovery is then seen, culminating in a ratio of 1.34 by February 1, 2026. The quick ratio’s movements indicate changes in the company’s ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Cash Ratio

The cash ratio followed a comparable trajectory, increasing from 1.43 to 1.92 before experiencing a decline to 0.58. A subsequent increase is noted, reaching 0.84 by February 1, 2026. This ratio highlights the company’s capacity to cover immediate liabilities with only cash and cash equivalents, demonstrating a more conservative measure of liquidity.

The concurrent declines in all three ratios from early 2023 through mid-2024 suggest a potential shift in working capital management, increased short-term liabilities, or a decrease in liquid assets. The partial recovery in the later periods indicates some improvement in the liquidity position, but the ratios have not fully returned to their previous levels. Continued monitoring of these ratios is recommended to assess the sustainability of this recovery and the overall health of the company’s short-term financial position.

The current ratio exhibited fluctuating behavior over the analyzed period, spanning from January 31, 2021, to November 2, 2025. Initially, the ratio demonstrated an upward trend, followed by a period of decline and subsequent volatility.

Initial Upward Trend (Jan 31, 2021 – Oct 31, 2021)

From January 31, 2021, to October 31, 2021, the current ratio increased from 2.14 to 2.64. This indicates a strengthening of the company’s ability to cover its short-term liabilities with its short-term assets during this timeframe. The increase suggests improved liquidity and a reduced risk of short-term solvency issues.

Subsequent Fluctuations (Nov 3, 2021 – Oct 29, 2023)

Following the peak in October 2021, the current ratio experienced fluctuations. It decreased to 2.14 by May 1, 2022, before recovering to 2.62 by July 31, 2022. The ratio then decreased again, reaching 2.38 by January 29, 2023, and 2.38 by October 29, 2023. This period suggests a less consistent liquidity position compared to the prior timeframe.

Significant Decline and Stabilization (Jan 29, 2023 – Nov 2, 2025)

A notable decline in the current ratio began in January 2024, falling to a low of 1.04 by August 4, 2024. The ratio then showed some recovery, reaching 1.90 by November 2, 2025. This recent decline indicates a substantial weakening in the company’s short-term liquidity position. The subsequent partial recovery suggests some improvement, but the ratio remains considerably lower than its levels observed earlier in the period. The substantial increase in current liabilities relative to current assets during this period appears to be the primary driver of this decline.

Overall, the current ratio demonstrates a shift from a relatively stable and healthy position in the earlier part of the period to a more volatile and concerning situation in the later period. The recent decline warrants further investigation to understand the underlying causes and potential implications for the company’s financial health.

The quick ratio for the analyzed period demonstrates considerable fluctuation. Initially, the ratio exhibited an upward trend, followed by a significant decline and subsequent partial recovery.

Initial Upward Trend (Jan 31, 2021 – Oct 31, 2021)

From January 31, 2021, to October 31, 2021, the quick ratio increased from 1.80 to 2.27. This indicates a strengthening of the company’s ability to meet its short-term obligations with its most liquid assets. Both total quick assets and current liabilities experienced changes during this period, but the growth in quick assets outpaced that of current liabilities.

Stabilization and Slight Decline (Jan 30, 2022 – Jul 30, 2023)

Following the peak in October 2021, the quick ratio stabilized, fluctuating between 1.75 and 2.34 through July 30, 2023. While some quarterly variations occurred, the ratio generally remained above 1.80, suggesting continued short-term liquidity. However, a slight downward trend is observable towards the end of this period.

Significant Decline (Oct 30, 2022 – Nov 3, 2024)

A substantial decrease in the quick ratio is evident from October 30, 2022, through November 3, 2024. The ratio fell from 2.18 to 0.82. This decline is primarily attributable to a significant increase in current liabilities, particularly noticeable from January 29, 2023, onwards, while the growth of quick assets did not keep pace. The ratio dipped below 1.0, indicating potential short-term liquidity concerns.

Partial Recovery (Feb 2, 2025 – Nov 2, 2025)

From February 2, 2025, to November 2, 2025, the quick ratio experienced a partial recovery, rising from 0.68 to 1.26. This improvement suggests some stabilization of the company’s short-term liquidity position, likely due to a combination of increased quick assets and a moderation in the growth of current liabilities. However, the ratio remained below the levels observed prior to October 2022.

Recent Trend (Feb 1, 2026)

The most recent data point, as of February 1, 2026, shows a quick ratio of 1.34. This represents a continuation of the recovery trend, but further monitoring is needed to determine if this represents a sustained improvement in short-term liquidity.

Overall, the quick ratio demonstrates a period of strength followed by a period of significant weakness and a recent, partial recovery. The substantial decline in the ratio warrants further investigation into the factors driving the increase in current liabilities and the potential impact on the company’s ability to meet its short-term obligations.

The cash ratio for the analyzed period demonstrates considerable fluctuation. Initially, the ratio exhibited an upward trend, followed by a significant decline and subsequent moderate recovery. A detailed examination reveals distinct phases in the company’s immediate liquidity position.

Initial Increasing Phase (Jan 31, 2021 – Oct 31, 2021)

From January 31, 2021, to October 31, 2021, the cash ratio increased from 1.43 to 1.94. This indicates a strengthening ability to cover current liabilities with readily available cash. Both total cash assets and current liabilities experienced changes during this period, but the growth in cash assets outpaced the growth in current liabilities, driving the ratio higher.

Subsequent Decline (Jan 30, 2022 – May 5, 2024)

Following the peak in October 2021, the cash ratio experienced a substantial decline, reaching a low of 0.49 by May 5, 2024. This decrease was primarily driven by a significant increase in current liabilities, while total cash assets remained relatively stable or even decreased slightly. The period between January 30, 2022, and May 5, 2024, shows a consistent erosion of the company’s ability to meet its short-term obligations with cash.

Partial Recovery (Aug 4, 2024 – Nov 2, 2025)

From August 4, 2024, the cash ratio began a recovery, albeit a moderate one, reaching 0.87 by November 2, 2025. This improvement is attributable to a combination of factors, including a decrease in current liabilities and an increase in total cash assets. However, the ratio remained below the levels observed in the earlier part of the analyzed period.

Recent Fluctuations (Feb 1, 2026)

The most recent observation, as of February 1, 2026, indicates a cash ratio of 0.84, a slight decrease from the November 2, 2025, value. This suggests potential renewed pressure on short-term liquidity, though the change is not substantial.

Overall, the company’s cash ratio has demonstrated significant volatility throughout the analyzed period. While an initial strengthening trend was observed, a pronounced decline followed, raising concerns about short-term liquidity. The subsequent partial recovery suggests some corrective measures were taken, but the ratio remains vulnerable to fluctuations in current liabilities and cash asset levels. Continued monitoring of this ratio is recommended.