Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
SolarEdge Technologies Inc., liquidity ratios (quarterly data)
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Current Ratio
- The current ratio demonstrated a fluctuating but overall decreasing trend from early 2018 to the end of 2019, moving from 3.6 in the first quarter of 2018 down to 2.14 by the fourth quarter of 2019. In 2020, the ratio showed a notable increase, peaking at 4.56 in the third quarter, before gradually stabilizing around values slightly below 4 in 2021. The ratio again declined in 2022, ending at 3.26 in the last quarter, indicating a slight reduction in liquidity compared to previous years but remaining above 2, suggesting continued adequate short-term financial strength.
- Quick Ratio
- The quick ratio closely mirrored the pattern of the current ratio, with a decline observed from 2.76 in early 2018 to a low point of 1.41 in the fourth quarter of 2019, reflecting a tightening of quick assets relative to current liabilities. A sharp recovery occurred throughout 2020, reaching a peak of 3.51 in the third quarter, followed by a modest decrease and relative stability in 2021 around the mid-2’s. During 2022, this ratio experienced a gradual downward trend toward approximately 2.17 by year-end, still indicating a reasonable level of immediate liquidity.
- Cash Ratio
- The cash ratio showed the most volatility and notably lower values than the other liquidity ratios. Starting at 1.96 in the first quarter of 2018, it declined sharply to 0.72 in the last quarter of 2019, highlighting a significant reduction in cash and cash equivalents relative to current liabilities during that period. In 2020, the ratio rebounded significantly to a high of 3.03 in the third quarter, then gradually decreased through 2021 and 2022, finishing at 1.15 in the fourth quarter of 2022. While the cash ratio remains above 1.0 for most quarters post-2019, the general downward trend in 2022 suggests a cautious approach to cash holdings relative to liabilities.
- Overall Analysis
- All three liquidity ratios experienced a notable decline from early 2018 through the end of 2019, followed by a pronounced recovery in 2020. This recovery suggests improved short-term financial flexibility, potentially driven by increased assets or reduced liabilities during that period. However, the gradual decline observed in 2021 and 2022 across all ratios indicates a slight deterioration in liquidity ratios, although they remain at levels considered comfortable for meeting short-term obligations. The cash ratio's sharper fluctuations may indicate changes in cash management policies or operational cash flow variability. Overall, the liquidity position remains sound but shows some pressures emerging in the most recent periods.
Current Ratio
SolarEdge Technologies Inc., current ratio calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
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| 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. | ||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets demonstrated a consistent increasing trend from March 31, 2018, through December 31, 2022. Starting at approximately $571 million, the value rose steadily, experiencing some fluctuations but overall maintaining growth. By the end of 2022, current assets reached nearly $2.9 billion, indicating a significant expansion in the company's short-term resources over the observed periods.
- Current Liabilities
- Current liabilities also increased throughout the periods but showed more volatility compared to current assets. Beginning around $159 million in early 2018, liabilities rose with some fluctuations and accelerated notably from 2020 onward. By December 31, 2022, current liabilities peaked near $890 million, illustrating growing obligations that increased substantially in recent years.
- Current Ratio
- The current ratio fluctuated within a range roughly between 2.1 and 4.6 across the reporting intervals. Initially high at 3.6 in early 2018, it reached a low of 2.14 by the end of 2019 but rebounded afterward, peaking at 4.56 in September 2020. Subsequently, the ratio stabilized around values above 3 until the end of 2022, where it declined to approximately 3.26. This indicates generally strong liquidity, with the company maintaining a buffer of current assets over current liabilities despite some periods of tightening liquidity positions.
- Summary
- The data reveals that the company steadily increased its current assets over the five-year span, supporting growth and operational capacity. Concurrently, current liabilities also ascended but at a pace that generally preserved a healthy liquidity margin, as reflected by the current ratio staying above 2 and predominantly around 3 or higher. Fluctuations in the current ratio suggest periodic shifts in short-term financial strategy or working capital management; however, the overall picture indicates sustained ability to meet short-term obligations while expanding asset bases significantly.
Quick Ratio
SolarEdge Technologies Inc., quick ratio calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||
| Marketable securities | ||||||||||||||||||||||||||
| Trade receivables, net of allowances | ||||||||||||||||||||||||||
| 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. | ||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets show a generally upward trend over the period from March 2018 to December 2022. Starting at approximately 438 million US dollars in the first quarter of 2018, quick assets increase steadily, with occasional fluctuations, reaching a notably high value of nearly 1.92 billion US dollars by the end of 2022. There is a significant jump between June 2020 and September 2020, where quick assets rose sharply from around 723 million to over 1.34 billion US dollars. Following this, a volatile pattern is observed in subsequent quarters but the overall trajectory remains positive, reflecting increased liquidity.
- Current Liabilities
- Current liabilities exhibit a consistent increasing trend, rising from about 159 million US dollars in March 2018 to nearly 890 million US dollars by December 2022. The increase is steady, with no periods of decline, suggesting growing short-term obligations. Notable growth periods include between September 2018 and December 2019 and again from March 2021 onwards, where liabilities escalated considerably. The continuing rise in current liabilities may indicate increased operational scale or higher short-term debt financing.
- Quick Ratio
- The quick ratio reveals variability in the company's short-term liquidity relative to its current liabilities. Starting at a strong 2.76 in March 2018, the ratio peaked at 3.04 in June 2018, then declined to a low point near 1.41 by December 2019. Subsequently, the ratio rose sharply to 3.51 in September 2020, coinciding with the spike in quick assets during that period. After this peak, the quick ratio fluctuated between approximately 2.17 and 2.76, but there is a general downward trend towards the end of 2022, finishing at 2.17. Despite these fluctuations, the ratio consistently remains above 1, indicating the company maintains sufficient liquid assets to cover its current liabilities at all times during this period.
- Summary Insights
- The data presents a picture of increased liquidity and growing short-term liabilities over time. The significant increase in total quick assets outpaces the rise in current liabilities, which supports a generally healthy quick ratio above 1 throughout the reported quarters. This suggests a solid liquidity position but with some volatility in the short-term coverage capacity. The sharp increases in quick assets around mid-2020 may reflect strategic asset accumulation or cash preservation measures in response to external market conditions. However, the steady rise in current liabilities underscores the importance of ongoing monitoring of short-term obligations to maintain financial stability.
Cash Ratio
SolarEdge Technologies Inc., cash ratio calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||
| Marketable securities | ||||||||||||||||||||||||||
| 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. | ||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibit a fluctuating yet generally upward trend over the observed periods. Initially, cash assets showed moderate variation around the 300,000–350,000 thousand USD mark during 2018 and 2019, with a notable dip towards the end of 2019. Starting in early 2020, there was a significant surge, especially visible in the third quarter of 2020 when cash assets peaked sharply above 1,150,000 thousand USD. This peak was followed by a decline during 2021, with values fluctuating between approximately 670,000 and 825,000 thousand USD. However, cash assets increased again in early 2022, reaching over 1,160,000 thousand USD in the first quarter before slightly declining and stabilizing around 880,000 to 1,020,000 thousand USD in the latter part of 2022.
- Current Liabilities
- Current liabilities consistently increased throughout the period examined. From 2018 to the end of 2019, liabilities rose steadily from roughly 150,000 thousand USD to over 430,000 thousand USD, indicating an increasing short-term obligation load. This upward trajectory continued into 2020 and beyond, with liabilities reaching approximately 525,000 thousand USD by the end of 2021. In 2022, the upward pressure intensified, culminating in a substantial rise to nearly 890,000 thousand USD by the last quarter. This continuous increase signals growing short-term financial obligations that could impact liquidity considerations.
- Cash Ratio
- The cash ratio demonstrates marked variability but generally remains above 1.0 in most periods, indicating that cash and cash equivalents often exceed current liabilities. In 2018, the ratio declined from near 2.0 to 0.72 by late 2019, reflecting a reduction in liquidity relative to liabilities. A significant improvement was observed starting in early 2020, with the ratio surging to a peak of 3.03 in the third quarter, corresponding with the large increase in cash assets. Subsequently, the ratio decreased through 2021 but stayed above 1.0, denoting maintained coverage of current liabilities by cash. In 2022, despite a few fluctuations, the ratio declined from just above 2.0 to around 1.15 by year-end, suggesting tighter liquidity but still adequate cash buffers relative to short-term debts.
- Overall Insights
- The financial data indicates an increasing accumulation of cash assets alongside a steady rise in current liabilities over the periods analyzed. While the total cash assets show significant peaks and troughs, the current liabilities trend upward consistently, suggesting expanding operational or financing activities requiring more short-term funding. Liquidity, as measured by the cash ratio, fluctuates but generally remains above 1.0, implying the company maintains a buffer of liquid funds to cover short-term liabilities, though this buffer narrows towards the end of 2022. This pattern points to cautious liquidity management amidst growing liabilities and variable cash holdings.