Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Income Statement
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Analysis of Revenues
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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 | ||||||
| Quick ratio | ||||||
| Cash ratio |
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).
- Current Ratio
- The current ratio demonstrated some variability over the analyzed period. Starting at a high level of 5.73 at the end of 2020, it declined to 4.96 in 2021, then slightly increased to 5.36 in 2022. A notable peak occurred in 2023, reaching 7.74, before decreasing again to 5.31 in 2024. Despite fluctuations, the current ratio remained substantially above 1.0 throughout, indicating a strong short-term liquidity position.
- Quick Ratio
- The quick ratio exhibited a general downward trend from 2020 to 2022, falling from 4.5 to 3.5. In 2023, there was a sharp increase to 5.84, which suggests an improvement in the company's ability to cover immediate liabilities without relying on inventory. However, this improvement was not sustained, as the ratio decreased again to 3.72 in 2024. Overall, this ratio shows significant volatility but remained comfortably above 1.0.
- Cash Ratio
- The cash ratio showed a declining trend initially, dropping from 4.05 at the end of 2020 to 2.8 in 2022. A significant rebound occurred in 2023, with the ratio climbing to 4.86, indicating enhanced cash coverage of current liabilities. This gain was partially reversed in 2024, when the ratio declined to 2.93. Despite these fluctuations, cash reserves relative to liabilities remained strong throughout the period.
- General Observations
- Liquidity indicators collectively suggest that while there is variability year to year, the company maintained a strong liquidity position across the analyzed years. Peaks in 2023 for all three ratios denote an exceptional year in liquidity. Subsequent declines in 2024 point to a reduction in short-term liquid resources relative to liabilities, though levels remained well above minimum thresholds. This pattern may reflect strategic management of working capital or timing differences in assets and liabilities.
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 | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Current Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Current Ratio, Industry | ||||||
| Information Technology | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets show a consistent upward trend from 2020 to 2023, increasing from $841,998,000 to $1,819,499,000. However, there is a noticeable decline in 2024, with current assets decreasing to $1,565,053,000. This suggests that after a period of steady asset growth, there was some reduction in liquidity or asset holdings in the most recent year.
- Current Liabilities
- Current liabilities increased steadily from $146,969,000 in 2020 to $263,400,000 in 2022. There was a slight decrease in 2023, dropping to $235,035,000, before rising again significantly to $294,567,000 in 2024. This fluctuation indicates variable short-term obligations with a notable increase at the end of the observed period.
- Current Ratio
- The current ratio, which measures short-term liquidity, declined from 5.73 in 2020 to 4.96 in 2021, indicating a slight reduction in liquidity. It then improved gradually to 5.36 in 2022 and showed a substantial increase to 7.74 in 2023, suggesting enhanced liquidity and potentially more conservative working capital management. In 2024, the ratio fell to 5.31 but remained above the levels observed in 2020 to 2022, indicating continued overall strong liquidity despite the decrease.
- Overall Analysis
- The company demonstrated growth in current assets over most of the five-year period, which combined with fluctuating current liabilities, influenced the variability in the current ratio. The peak liquidity in 2023 aligns with the highest current assets and relatively controlled liabilities. The decrease in both current assets and the current ratio in 2024 signals a shift that may warrant further analysis to understand the causes behind reduced liquidity and increased liabilities.
Quick Ratio
Monolithic Power Systems Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Accounts receivable, net | ||||||
| Other receivables | ||||||
| Restricted cash | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Quick Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Quick Ratio, Industry | ||||||
| Information Technology | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets showed a general upward trend from 2020 through 2023, increasing from 661,956 thousand US dollars in 2020 to a peak of 1,371,538 thousand US dollars in 2023. However, in 2024, there was a noticeable decline to 1,095,464 thousand US dollars, marking a significant reduction from the previous year but still higher than the values reported in 2020 to 2022.
- Current Liabilities
- Current liabilities increased consistently over the observed period, beginning at 146,969 thousand US dollars in 2020 and reaching 294,567 thousand US dollars in 2024. Although there was a slight decrease from 263,400 thousand in 2022 to 235,035 thousand in 2023, the overall trend points to a growth in short-term obligations.
- Quick Ratio
- The quick ratio experienced fluctuations over the years. It started at 4.5 in 2020, decreasing to 3.66 in 2021, and further slightly down to 3.5 in 2022. A sharp increase occurred in 2023, with the ratio peaking at 5.84, indicating a substantial improvement in liquidity. This was followed by a decline in 2024 to 3.72, which, while lower than the preceding year, remains above the 2021-2022 levels. The volatility in the quick ratio reflects changes in the company's ability to cover its current liabilities with quick assets, influenced by both asset and liability movements.
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 | ||||||
| Short-term investments | ||||||
| Restricted cash | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Cash Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Cash Ratio, Industry | ||||||
| Information Technology | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- There was a general upward trend in total cash assets from 2020 to 2023, increasing from approximately 595 million USD to over 1.14 billion USD. This represents a significant accumulation of cash reserves during this period. However, in 2024, total cash assets declined to about 863 million USD, indicating a notable reduction compared to the prior year.
- Current Liabilities
- Current liabilities exhibited a rising pattern overall, increasing steadily from approximately 147 million USD in 2020 to nearly 295 million USD in 2024. There was a slight dip in 2023 to 235 million USD, but the general trend indicates growing short-term obligations over the five-year span.
- Cash Ratio
- The cash ratio, which measures cash and cash equivalents relative to current liabilities, showed fluctuations throughout the period. Starting at a strong level of 4.05 in 2020, it decreased to 2.8 by 2022, indicating a reduction in liquidity relative to liabilities. In 2023, the ratio increased sharply to 4.86, reflecting an improved liquidity position. However, this was followed by a decline to 2.93 in 2024, signifying a moderate drop in ability to cover short-term liabilities with cash.
- Overall Insights
- Over the observed period, cash assets grew substantially until 2023, supporting enhanced liquidity as evidenced by the high cash ratio that year. Meanwhile, current liabilities showed a general increase, suggesting a rise in short-term financial commitments. The volatility in the cash ratio indicates varying liquidity management strategies or operational cash flow changes. The decline in both cash assets and cash ratio in 2024 could imply increased cash usage or investment, or possibly higher liabilities, highlighting a need for continued monitoring of short-term financial stability.