Liquidity ratios measure the company ability to meet its short-term obligations.
Paying user area
Try for free
Texas Instruments Inc. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Texas Instruments Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Liquidity Ratios (Summary)
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).
The analysis of the liquidity ratios over the five-year period reveals a general downward trend after an initial increase. The current ratio increased significantly from 4.28 in 2020 to a peak of 5.33 in 2021, indicating an improvement in the company's ability to cover its short-term liabilities with its short-term assets. However, after 2021, the current ratio shows a gradual decline, settling at 4.12 by the end of 2024. Despite this decrease, the ratio remains above 4, which is typically considered a strong liquidity position.
Similarly, the quick ratio, which excludes inventory from current assets and thus provides a stricter measure of liquidity, follows a comparable pattern. It rose sharply from 3.34 in 2020 to 4.45 in 2021, signaling enhanced short-term financial health. Subsequently, it declined steadily each year, reaching 2.55 in 2024. Although lower than the initial peak, this level still suggests a relatively comfortable buffer to meet immediate obligations without relying on inventory sales.
The cash ratio, representing the most conservative liquidity measure by considering only cash and cash equivalents relative to current liabilities, also reflects this trend. It increased from 2.75 in 2020 to 3.79 in 2021, demonstrating strong cash reserves. From that point, it gradually decreased year over year to 2.08 by 2024. This decline indicates a reduction in liquid cash reserves relative to current liabilities but remains at a level consistent with solid liquidity.
Overall, the liquidity position improved markedly from 2020 to 2021 across all three ratios, suggesting effective management of working capital or a buildup in short-term assets. The subsequent downward trend through to 2024 may reflect strategic asset reallocation, increased liabilities, or other operational factors influencing liquidity. Despite the declines, the ratios remain at relatively elevated levels, signifying an ongoing capacity to cover short-term liabilities comfortably.
Current Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
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. | ||||||
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 exhibit a consistent upward trend from 10,239 million US dollars at the end of 2020, rising steadily to a peak of 15,122 million US dollars in 2023, followed by a slight decline to 15,026 million US dollars in 2024. This pattern indicates an overall strengthening of liquid or short-term asset holdings over the five-year period.
- Current Liabilities
- Current liabilities demonstrate a continuous increase throughout the period. Starting from 2,390 million US dollars in 2020, liabilities grew at a moderate pace initially and then increased more substantially, reaching 3,643 million US dollars by the end of 2024. This reflects rising short-term obligations over time.
- Current Ratio
- The current ratio, calculated as current assets divided by current liabilities, shows a decreasing trend despite remaining above the value of 4 across all years. It peaks at 5.33 in 2021, then gradually declines each year to 4.12 in 2024. Although the ratio remains at a comfortable level indicating healthy liquidity, the downward movement suggests a relatively faster growth in current liabilities compared to current assets over time.
Quick Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Accounts receivable, 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. | ||||||
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.
The analysis of the financial data reveals a clear downward trend in the liquidity position over the observed period. Total quick assets exhibited an initial increase from 7,982 million US dollars at the end of 2020 to a peak of 11,440 million US dollars by the end of 2021. However, this was followed by a gradual decline to 9,299 million US dollars by the end of 2024.
Concurrently, current liabilities showed a consistent upward trajectory, rising steadily from 2,390 million US dollars in 2020 to 3,643 million US dollars in 2024. This increase in obligations has had an impact on the company’s liquidity ratios.
- Quick Ratio Trends
- The quick ratio, which measures the ability to meet short-term liabilities with easily liquidated assets, peaked at 4.45 in 2021, reflecting strong liquidity. Subsequent years saw a decline in this ratio to 2.55 in 2024, indicating that the company’s buffer of quick assets over current liabilities has diminished significantly. Despite this decline, the ratio remains above 1, suggesting that short-term obligations are still covered by liquid assets, but the margin is narrowing.
Overall, the trend indicates that while quick assets initially increased, they have been outpaced by the growth in current liabilities in recent years, leading to a decrease in liquidity strength. This may warrant closer attention to working capital management to ensure ongoing financial flexibility.
Cash Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
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. | ||||||
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
- The total cash assets exhibit a rising trend from 2020 to 2021, increasing from 6,568 million US dollars to 9,739 million US dollars. Subsequently, there is a decline over the following years, with total cash assets decreasing to 9,067 million in 2022, 8,575 million in 2023, and 7,580 million in 2024. This pattern indicates a peak in cash holdings in 2021, followed by a steady reduction thereafter.
- Current Liabilities
- Current liabilities show a consistent upward trajectory throughout the period. Starting at 2,390 million US dollars at the end of 2020, current liabilities increase year by year, reaching 2,569 million in 2021, 2,985 million in 2022, 3,320 million in 2023, and 3,643 million in 2024. This persistent rise suggests growing short-term obligations.
- Cash Ratio
- The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, initially improves from 2.75 in 2020 to a peak of 3.79 in 2021. After this peak, the ratio declines steadily to 3.04 in 2022, 2.58 in 2023, and further to 2.08 in 2024. Despite the decline, the ratio remains above 2.0, indicating a continued strong liquidity position, although with diminishing buffer over time.
- Overall Analysis
- The data reveals that although cash assets peaked in 2021 and decreased subsequently, the company maintained a robust cash position relative to its current liabilities. The steady rise in current liabilities paired with declining cash assets leads to a decreasing cash ratio, reflecting a moderation in liquidity strength. Nevertheless, the cash ratio staying above 2 indicates the company remained well-positioned to meet its short-term obligations through cash resources throughout the period assessed.