NVIDIA Corp. (NASDAQ:NVDA)

Current Ratio

The current ratio exhibits significant fluctuations over the analyzed periods. Starting at a high level of 7.67 in early 2020, it declined sharply to 4.09 in early 2021. Subsequently, it rebounded to 6.65 in early 2022 before descending again to 3.52 in early 2023. The ratio then demonstrated a moderate improvement in the following two years, reaching 4.17 in early 2024 and 4.44 in early 2025. Overall, while the current ratio remains above the typical benchmark of 1, suggesting comfortable short-term liquidity, the downward trend from the initial peak indicates reduced current asset coverage of short-term liabilities over time, mitigated slightly by recent improvements.

Quick Ratio

The quick ratio mirrors the behavior of the current ratio but reflects more conservative liquidity by excluding inventories. Beginning at a high point of 7.04 in early 2020, it dropped considerably to 3.56 in early 2021. After a partial recovery to 5.96 in early 2022, it decreased again to 2.61 in early 2023. In the most recent years, there is a visible upward trend, with the ratio increasing to 3.38 in early 2024 and further to 3.67 in early 2025. Despite the decline from its initial peak, the quick ratio remains robust, indicating strong liquid asset coverage against current liabilities throughout the period.

Cash Ratio

The cash ratio follows a similar trend to the other liquidity ratios but at lower levels, reflecting the most stringent measure of liquidity. It started at 6.11 in early 2020, falling sharply to 2.95 by early 2021. There was a moderate recovery to 4.89 in early 2022, followed by a further decline to 2.03 in early 2023. The ratio stabilized somewhat in the latest periods, with minor variations at 2.44 in early 2024 and 2.39 in early 2025. The consistently strong cash ratio values above 2 indicate a solid position of cash and cash equivalents relative to current liabilities, though the downward trend from the initial years signals reduced cash reserves availability.

Summary

All three liquidity ratios demonstrate high initial values in early 2020, followed by a notable decline in early 2021. This is succeeded by partial recoveries and subsequent declines, with a modest upward trend in the most recent years. The liquidity profile, while decreasing from initial peaks, remains strong overall, with ratios well above standard thresholds, reflecting a comfortable ability to meet short-term obligations. The trends suggest a strategic adjustment in working capital management or changes in operational cycle dynamics over the analyzed timeframe.

The financial data reveals several notable trends in the company's short-term financial positioning over the examined periods.

Current Assets

There is a clear and significant upward trend in current assets from January 26, 2020, through January 26, 2025. The value increased from 13,690 million US dollars in 2020 to 80,126 million US dollars by 2025. Despite a slight dip observed in January 29, 2023 (23,073 million US dollars), the general growth trajectory is strong, indicating increasing liquidity and resources available for meeting short-term obligations.

Current Liabilities

Current liabilities have also increased steadily over the same period, from 1,784 million US dollars in 2020 to 18,047 million US dollars in 2025. This rise reflects increased short-term obligations, which may correspond with business expansion, increased operational scale, or higher accrued expenses. The increases are more pronounced especially after 2021, with a notable jump between 2023 and 2025.

Current Ratio

The current ratio demonstrates some variability but generally maintains a level above 3.5 throughout the years. The ratio started at a very high 7.67 in 2020, implying a strong liquidity position at that time. It declined sharply to 4.09 in 2021 and further to 3.52 in 2023, suggesting relative tightening of liquidity or faster growth in liabilities relative to assets during that period. Subsequently, there is a modest recovery to 4.17 in 2024 and 4.44 in 2025, which still indicates a healthy ability to cover short-term debts, albeit at a lower margin than the initial year.

Overall, the data portrays a company with growing asset and liability balances, maintaining a generally robust liquidity position. The declining yet stable current ratio highlights that, despite rising liabilities, the company appears well-positioned to meet its short-term obligations with a comfortable asset buffer.

Quick Assets and Current Liabilities

The total quick assets exhibited considerable fluctuation over the periods analyzed. Starting at US$12,554 million in early 2020, the figure increased to US$13,990 million in early 2021, then sharply rose to US$25,858 million in early 2022. A notable decline followed in early 2023 to US$17,123 million, but this was succeeded by substantial increases to US$35,983 million and US$66,275 million in early 2024 and early 2025, respectively.

Current liabilities, by comparison, showed a consistent upward trend throughout the entire span. From US$1,784 million in 2020, these increased steadily each year to US$3,925 million in 2021, US$4,335 million in 2022, US$6,563 million in 2023, US$10,631 million in 2024, and finally reaching US$18,047 million in 2025.

Quick Ratio Analysis

The quick ratio, which measures the ability to meet short-term liabilities with quick assets, indicated variability but generally remained above 2.5, suggesting ongoing liquidity strength though with some volatility. It started at a high 7.04 in 2020, which declined to 3.56 in 2021, then increased again to 5.96 in 2022 before dropping to a low of 2.61 in 2023. Subsequent periods showed moderate recovery with ratios of 3.38 in 2024 and 3.67 in 2025.

This fluctuation suggests that while short-term liquidity dipped in 2023, it was supported by expanding quick assets and growing liabilities. The elevated quick ratio in 2022 marked a peak in liquidity relative to liabilities, but the overall trend reflects a balancing between asset growth and increasing obligations.

Overall Observations

The data underscores a dynamic financial position characterized by rapidly increasing quick assets and current liabilities, with the company's liquidity relatively stable despite pressures from rising obligations. The significant jumps in quick assets, particularly in 2022, 2024, and 2025, likely contributed to maintaining a comfortable quick ratio above industry concerns thresholds.

The rise in current liabilities suggests increased operational scale or financing activity, which was effectively managed given the company's liquidity measures. The fluctuations in the quick ratio emphasize the importance of closely monitoring short-term asset-liability management to sustain financial health.

Total Cash Assets

The total cash assets display a general upward trend over the analyzed periods. Starting at $10,897 million in early 2020, the cash assets increased significantly to $21,208 million in early 2022. A decline is observed in early 2023, where cash assets decrease to $13,296 million, before rising sharply to reach $43,210 million in early 2025, the highest value in the period. This indicates strong liquidity growth in the most recent year despite some volatility.

Current Liabilities

Current liabilities demonstrate a steady increase throughout the period. Beginning at $1,784 million in early 2020, liabilities more than double to $4,335 million by early 2022. The upward trajectory continues with a noticeable acceleration starting in early 2023, climbing to $18,047 million by early 2025. This growth signals increasing short-term obligations that have escalated significantly in the most recent years.

Cash Ratio

The cash ratio shows considerable variability but an overall declining trend from 6.11 in early 2020 to approximately 2.39 in early 2025. There are peaks and troughs throughout the period, with the highest ratio in 2020 indicating strong immediate liquidity. The lowest point is observed in early 2023 at 2.03, followed by a mild recovery but remaining below earlier peak levels. The decreasing cash ratio suggests that despite increasing cash assets, liabilities have grown faster, slightly weakening the company's ability to cover short-term liabilities exclusively with cash.

Summary

The financial data reveals a significant growth in total cash assets alongside a substantial rise in current liabilities. While liquidity by cash assets increased, the cash ratio has declined over the period, indicating that current liabilities are expanding at a faster rate in relation to cash on hand. This trend suggests the company is taking on more short-term obligations, which could reflect strategic investments or operating needs but requires monitoring to ensure maintaining a robust liquidity position.