Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Monolithic Power Systems Inc., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 5.31 | 7.74 | 5.36 | 4.96 | 5.73 | |
| Quick ratio | 3.72 | 5.84 | 3.50 | 3.66 | 4.50 | |
| Cash ratio | 2.93 | 4.86 | 2.80 | 3.19 | 4.05 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The liquidity profile of the organization exhibits an exceptionally strong position throughout the five-year period, characterized by high safety margins and a significant surge in liquid assets during 2023.
- Current Ratio
- The current ratio remained robust, starting at 5.73 in 2020 and fluctuating slightly before reaching a peak of 7.74 in 2023. By the end of 2024, the ratio moderated to 5.31. This consistently high value indicates a substantial capacity to cover short-term obligations with current assets.
- Quick Ratio
- A similar trajectory is observed in the quick ratio, which moved from 4.50 in 2020 to a high of 5.84 in 2023, before settling at 3.72 in 2024. The relatively small gap between the current and quick ratios suggests that inventory does not constitute a disproportionate share of current assets, meaning liquidity is not heavily dependent on the sale of stock.
- Cash Ratio
- The cash ratio, the most conservative liquidity measure, showed a decline from 4.05 in 2020 to a low of 2.80 in 2022, followed by a sharp increase to 4.86 in 2023 and a subsequent return to 2.93 in 2024. The consistently high values indicate that a significant portion of the organization's current assets is held in cash or cash equivalents.
Overall, the convergence of these trends reveals a period of extreme liquidity accumulation in 2023, followed by a normalization in 2024. The consistently high ratios across all three metrics suggest an extremely low risk of short-term insolvency, although such elevated levels may also indicate a conservative capital management strategy with significant excess cash.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Current Ratio
Monolithic Power Systems Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 1,565,053) | 1,819,499) | 1,410,619) | 1,124,852) | 841,998) | |
| Current liabilities | 294,567) | 235,035) | 263,400) | 226,944) | 146,969) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 5.31 | 7.74 | 5.36 | 4.96 | 5.73 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 2.62 | 2.51 | 2.36 | 2.02 | — | |
| Analog Devices Inc. | 1.84 | 1.37 | 2.02 | 1.94 | 1.84 | |
| Applied Materials Inc. | 2.51 | 2.60 | 2.16 | 2.54 | 3.00 | |
| Broadcom Inc. | 1.17 | 2.82 | 2.62 | 2.64 | 1.87 | |
| Intel Corp. | 1.33 | 1.54 | 1.57 | 2.10 | — | |
| KLA Corp. | 2.15 | 2.24 | 2.50 | 2.71 | — | |
| Lam Research Corp. | 2.97 | 3.16 | 2.69 | 3.30 | — | |
| Marvell Technology Inc. | 1.69 | 1.37 | 1.80 | 1.50 | — | |
| Micron Technology Inc. | 2.64 | 4.46 | 2.89 | 3.10 | — | |
| NVIDIA Corp. | 4.17 | 3.52 | 6.65 | 4.09 | — | |
| Qualcomm Inc. | 2.40 | 2.33 | 1.75 | 1.68 | 2.14 | |
| Texas Instruments Inc. | 4.12 | 4.55 | 4.70 | 5.33 | — | |
| Current Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 2.14 | 2.42 | 2.33 | 2.45 | — | |
| Current Ratio, Industry | ||||||
| Information Technology | 1.24 | 1.41 | 1.37 | 1.55 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 1,565,053 ÷ 294,567 = 5.31
2 Click competitor name to see calculations.
The analysis of liquidity positions from 2020 to 2024 indicates a consistently strong ability to cover short-term obligations, with a current ratio that remains significantly above standard industry benchmarks. While the ratio has experienced fluctuations, the overall liquidity profile remains robust, characterized by a substantial cushion of current assets relative to current liabilities.
- Current Ratio Volatility and Trends
- The current ratio began at 5.73 in 2020 and experienced a slight decline to 4.96 in 2021. A recovery followed, with the ratio climbing to 5.36 in 2022 and reaching a five-year peak of 7.74 in 2023. By the end of 2024, the ratio moderated to 5.31. This volatility suggests shifts in working capital management rather than a deterioration of financial health, as the ratio never dropped below 4.96.
- Current Asset Trajectory
- A sustained upward trend in current assets was observed between 2020 and 2023, with values increasing from 841,998 thousand US$ to 1,819,499 thousand US$. This represents a significant expansion of liquid resources. However, a reversal occurred in 2024, where current assets decreased to 1,565,053 thousand US$, contributing to the subsequent decline in the current ratio.
- Current Liability Dynamics
- Current liabilities demonstrated a general upward trend, rising from 146,969 thousand US$ in 2020 to 294,567 thousand US$ in 2024. A notable exception occurred in 2023, where liabilities decreased to 235,035 thousand US$. This simultaneous increase in assets and decrease in liabilities in 2023 served as the primary driver for the spike in the current ratio to 7.74.
- Liquidity Assessment
- The consistently high current ratio suggests an extremely conservative liquidity posture. The capacity to meet short-term debts is more than fivefold in every reported year. The 2024 movement—characterized by a reduction in assets and an increase in liabilities—indicates a normalization of the liquidity position following the peak observed in the previous year.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Quick Ratio
Monolithic Power Systems Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 691,816) | 527,843) | 288,607) | 189,265) | 334,944) | |
| Short-term investments | 171,130) | 580,633) | 449,266) | 535,817) | 260,169) | |
| Accounts receivable, net | 172,518) | 179,858) | 182,714) | 104,813) | 66,843) | |
| Other receivables | 60,000) | 50,000) | —) | —) | —) | |
| Restricted cash | —) | 33,204) | —) | —) | —) | |
| Total quick assets | 1,095,464) | 1,371,538) | 920,587) | 829,895) | 661,956) | |
| Current liabilities | 294,567) | 235,035) | 263,400) | 226,944) | 146,969) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 3.72 | 5.84 | 3.50 | 3.66 | 4.50 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 1.56 | 1.51 | 1.57 | 1.49 | — | |
| Analog Devices Inc. | 1.24 | 0.76 | 1.34 | 1.24 | 1.31 | |
| Applied Materials Inc. | 1.74 | 1.63 | 1.17 | 1.64 | 1.95 | |
| Broadcom Inc. | 0.82 | 2.34 | 2.18 | 2.27 | 1.56 | |
| Intel Corp. | 0.72 | 1.01 | 1.01 | 1.38 | — | |
| KLA Corp. | 1.36 | 1.33 | 1.57 | 1.81 | — | |
| Lam Research Corp. | 1.93 | 1.95 | 1.72 | 2.11 | — | |
| Marvell Technology Inc. | 1.14 | 0.88 | 1.20 | 1.19 | — | |
| Micron Technology Inc. | 1.59 | 2.53 | 1.92 | 2.17 | — | |
| NVIDIA Corp. | 3.38 | 2.61 | 5.96 | 3.56 | — | |
| Qualcomm Inc. | 1.64 | 1.51 | 1.01 | 1.34 | 1.75 | |
| Texas Instruments Inc. | 2.55 | 3.12 | 3.67 | 4.45 | — | |
| Quick Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 1.41 | 1.60 | 1.62 | 1.78 | — | |
| Quick Ratio, Industry | ||||||
| Information Technology | 0.96 | 1.12 | 1.09 | 1.30 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 1,095,464 ÷ 294,567 = 3.72
2 Click competitor name to see calculations.
The organization maintains a consistently strong liquidity position, characterized by a quick ratio that remains significantly above the standard benchmark of 1.0 throughout the observed five-year period.
- Quick Asset Trajectory
- Total quick assets exhibited a sustained upward trend from December 31, 2020, through December 31, 2023, rising from $661.96 million to a peak of $1.37 billion. A contraction occurred by the end of 2024, with quick assets decreasing to approximately $1.10 billion.
- Current Liabilities Dynamics
- Current liabilities generally followed an upward trajectory, starting at $146.97 million in 2020 and reaching $294.57 million by 2024. A temporary decrease was noted in 2023, where liabilities dropped to $235.04 million, which contributed to the spike in liquidity ratios for that fiscal year.
- Quick Ratio Fluctuations
- The quick ratio experienced moderate volatility, starting at 4.50 in 2020 and declining to 3.50 by 2022. A significant peak of 5.84 was recorded in 2023, driven by the simultaneous increase in quick assets and a reduction in current liabilities. By the end of 2024, the ratio normalized to 3.72, reflecting the reduction in liquid assets paired with an increase in current obligations.
Overall, the liquidity profile suggests a conservative financial strategy with a substantial buffer of highly liquid assets available to cover immediate short-term obligations, ensuring high solvency across all reported periods.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Cash Ratio
Monolithic Power Systems Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 691,816) | 527,843) | 288,607) | 189,265) | 334,944) | |
| Short-term investments | 171,130) | 580,633) | 449,266) | 535,817) | 260,169) | |
| Restricted cash | —) | 33,204) | —) | —) | —) | |
| Total cash assets | 862,946) | 1,141,680) | 737,873) | 725,082) | 595,113) | |
| Current liabilities | 294,567) | 235,035) | 263,400) | 226,944) | 146,969) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 2.93 | 4.86 | 2.80 | 3.19 | 4.05 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.70 | 0.86 | 0.92 | 0.85 | — | |
| Analog Devices Inc. | 0.79 | 0.30 | 0.60 | 0.71 | 0.77 | |
| Applied Materials Inc. | 1.12 | 0.93 | 0.35 | 0.86 | 1.29 | |
| Broadcom Inc. | 0.56 | 1.92 | 1.76 | 1.94 | 1.20 | |
| Intel Corp. | 0.62 | 0.89 | 0.88 | 1.03 | — | |
| KLA Corp. | 0.97 | 0.87 | 0.94 | 1.19 | — | |
| Lam Research Corp. | 1.35 | 1.28 | 0.77 | 1.25 | — | |
| Marvell Technology Inc. | 0.52 | 0.38 | 0.44 | 0.69 | — | |
| Micron Technology Inc. | 0.88 | 2.01 | 1.24 | 1.34 | — | |
| NVIDIA Corp. | 2.44 | 2.03 | 4.89 | 2.95 | — | |
| Qualcomm Inc. | 1.27 | 1.18 | 0.54 | 1.04 | 1.29 | |
| Texas Instruments Inc. | 2.08 | 2.58 | 3.04 | 3.79 | — | |
| Cash Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.99 | 1.20 | 1.14 | 1.29 | — | |
| Cash Ratio, Industry | ||||||
| Information Technology | 0.57 | 0.71 | 0.67 | 0.89 | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 862,946 ÷ 294,567 = 2.93
2 Click competitor name to see calculations.
The liquidity position of Monolithic Power Systems Inc. remains exceptionally strong over the five-year period analyzed, characterized by a cash ratio that consistently stays well above the 1.0 threshold. This indicates a continuous and robust capability to settle all current obligations using only cash and cash equivalents, without the need to liquidate inventory or collect accounts receivable.
- Total Cash Assets Trend
- Cash holdings experienced a general upward trajectory from 2020 through 2023, growing from $595.1 million to a peak of $1.14 billion. A subsequent contraction was observed in 2024, where assets decreased to $862.9 million.
- Current Liabilities Trend
- Current liabilities showed a steady overall increase, rising from $146.9 million in 2020 to a period high of $294.6 million in 2024. A marginal decrease occurred in 2023, falling to $235.0 million before resuming the upward trend.
- Cash Ratio Performance
- The cash ratio exhibited notable volatility despite remaining at high levels. An initial downward trend was observed between 2020 and 2022, with the ratio moving from 4.05 to 2.80. A significant spike occurred in 2023, reaching a peak of 4.86 due to the simultaneous increase in cash assets and reduction in liabilities. In 2024, the ratio retracted to 2.93, reflecting the combined impact of lower cash reserves and increased short-term obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?