Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
NXP Semiconductors N.V., liquidity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
- Current Ratio
- The current ratio demonstrates fluctuations over the five-year period. Beginning at 2.22 in 2017, it decreased significantly to 1.54 in 2018, indicating a reduction in short-term liquidity. However, the ratio then showed a recovery trend, rising to 1.82 in 2019 and further increasing to above 2.1 in both 2020 and 2021. This improvement suggests enhanced capability to cover current liabilities with current assets toward the end of the period.
- Quick Ratio
- The quick ratio follows a somewhat similar pattern but remains generally lower than the current ratio across all years. Starting at 1.63 in 2017, it declined sharply to 1.06 in 2018 and dropped slightly below 1.0 in 2019, implying reduced immediate liquidity excluding inventories. Subsequently, it improved markedly in 2020 and 2021, rising to 1.51 and 1.53 respectively, indicating a strengthening liquid asset position relative to current liabilities.
- Cash Ratio
- The cash ratio exhibits the most volatility and lowest values among the three liquidity measures. Beginning at a strong position of 1.31 in 2017, it sharply decreased to 0.82 in 2018 and further to 0.58 in 2019, showing a tightening of cash and cash equivalents relative to current liabilities. The subsequent years saw a notable rebound, with the cash ratio increasing to 1.13 in 2020 and slightly further to 1.15 in 2021, reflecting a restoration of cash reserves or highly liquid assets.
- Overall Analysis
- Overall, the data indicates a dip in liquidity ratios in 2018 and 2019, signaling a period of relatively weaker short-term financial flexibility. This trend reverses in 2020 and 2021, with steady improvement across all liquidity measures. The current and quick ratios above 1.5 in the final two years suggest a comfortable liquidity buffer, while the cash ratio's recovery to above 1.1 reflects improved cash management. These patterns might point to successful efforts to strengthen the liquidity position after the downturn in the middle years.
Current Ratio
NXP Semiconductors N.V., current ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| 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: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets declined significantly from 2017 to 2019, dropping from 6,044 million USD to 3,267 million USD. This represented a contraction of approximately 46%. However, following this trough in 2019, current assets showed a recovery, increasing steadily to 4,324 million USD in 2020 and further to 5,228 million USD in 2021.
- Current Liabilities
- Current liabilities showed a less consistent pattern. Initially, there was an increase from 2,718 million USD in 2017 to 3,385 million USD in 2018. Thereafter, they decreased sharply to 1,791 million USD in 2019, followed by gradual increases to 2,017 million USD in 2020 and 2,452 million USD in 2021.
- Current Ratio
- The current ratio started high at 2.22 in 2017, indicating strong short-term liquidity. It declined to a minimum of 1.54 in 2018, reflecting increased pressure on liquidity. This was followed by an improvement trend, with the current ratio rising to 1.82 in 2019 and above 2.1 in both 2020 and 2021, suggesting a recovery and maintenance of liquidity above the generally accepted threshold of 1.0.
- Overall Financial Position Insights
- Overall, the financial data indicate that liquidity initially weakened in 2018 and 2019, as seen in decreasing current assets and fluctuating current liabilities. From 2020 onward, there was a consistent improvement in liquidity, with current assets increasing faster than current liabilities and the current ratio stabilizing above 2. This suggests a rebound in the company's ability to cover short-term obligations without strain, highlighting enhanced financial stability in the most recent years.
Quick Ratio
NXP Semiconductors N.V., quick ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Accounts receivables, net | ||||||
| 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: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets decreased markedly from 4,426 million US dollars in 2017 to 1,712 million in 2019, representing a significant decline over these two years. However, starting from 2019, there was a recovery trend as quick assets increased to 3,040 million in 2020 and further to 3,753 million in 2021, though the levels in 2021 remained below those in 2017.
- Current liabilities
- Current liabilities showed volatility over the period. Initially, these liabilities rose from 2,718 million US dollars in 2017 to 3,385 million in 2018. Subsequently, there was a pronounced decline to 1,791 million in 2019, followed by a gradual increase, reaching 2,452 million by the end of 2021. Despite recovering after 2019, current liabilities in 2021 remained below the peak of 2018.
- Quick ratio
- The quick ratio exhibited a downward trend from 1.63 in 2017 to below 1.00 in 2019 at 0.96, indicating a potential short-term liquidity concern during that year. The ratio then improved significantly in 2020 and 2021, rising to 1.51 and 1.53 respectively, suggesting enhanced liquidity and the firm's improved ability to cover current liabilities with its quick assets in the later years.
Cash Ratio
NXP Semiconductors N.V., cash ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| 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: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The financial data displays trends in liquidity and short-term obligations over a five-year period ending December 31, 2021.
- Total Cash Assets
- The total cash assets show a fluctuating pattern. Initially, there is a decrease from 3,547 million USD in 2017 to 1,045 million USD in 2019, representing a significant reduction in available cash resources. However, from 2019 onwards, there is a recovery trend, with cash assets increasing to 2,275 million USD in 2020 and further to 2,830 million USD by 2021, indicating an improvement in liquidity management or cash inflows during those years.
- Current Liabilities
- Current liabilities show variable movements during the analyzed period. They increase from 2,718 million USD in 2017 to a peak of 3,385 million USD in 2018, then sharply decrease to 1,791 million USD in 2019. Following this, there is a gradual increase to 2,017 million USD in 2020 and 2,452 million USD in 2021. The reduction in 2019 could be indicative of effective short-term debt management or payment of obligations, while the subsequent increase may reflect increased operational liabilities or short-term financing needs.
- Cash Ratio
- The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, corresponds closely with the movements in cash assets and current liabilities. It declines significantly from 1.31 in 2017 to 0.58 in 2019, signaling a reduction in immediate liquidity relative to obligations. Afterward, it improves to 1.13 in 2020 and slightly increases to 1.15 in 2021, showing enhanced liquidity and a stronger capacity to meet short-term liabilities with available cash.
Overall, the data indicates a period of reduced liquidity and cash resources leading up to 2019, followed by a recovery phase where cash assets and the cash ratio improved, even as current liabilities partially rose. This suggests a restoration of stronger liquidity positions in the latter years while managing fluctuating short-term obligations.