Texas Instruments Inc. (NASDAQ:TXN)

The liquidity profile demonstrates a general downward trend across all three primary metrics over the observed period, although ratios remain substantially above unity, indicating a robust capacity to meet short-term obligations.

Current Ratio

The current ratio exhibits cyclical volatility, starting at 5.54 in March 2022 and ending at 4.86 in June 2026. Notable peaks were recorded in June 2023 (5.72) and June 2025 (5.81). Despite periodic compressions, such as the decline to 4.12 in December 2024, the ratio consistently remains high, suggesting a significant cushion of current assets relative to current liabilities.

Quick Ratio

The quick ratio follows a similar trajectory to the current ratio but at a lower baseline, moving from 4.60 in March 2022 to 2.93 in June 2026. A sustained decline is evident from mid-2023 through December 2025, where the ratio reached a low of 2.17. The persistent gap between the current and quick ratios indicates that inventory constitutes a meaningful portion of the current asset base.

Cash Ratio

The most pronounced contraction is observed in the cash ratio, which decreased from 3.89 in March 2022 to a low of 1.55 in December 2025, before recovering to 2.16 in June 2026. This trend indicates a reduction in the proportion of immediate cash and cash equivalents held relative to current liabilities, although the company maintains a cash position capable of covering its short-term debts more than once over at all points in the series.

An overall convergence of the three ratios is observed over time, suggesting a shift in liquidity management or an increase in short-term liabilities. Nevertheless, the absolute values remain exceptionally high, indicating that liquidity risk remains minimal.

The liquidity position remains exceptionally strong throughout the analyzed period, characterized by a current ratio that consistently exceeds 4.0. This indicates a substantial margin of safety and an aggressive liquidity posture, as current assets significantly outweigh current liabilities in every reported quarter.

Current Asset Trends

Current assets exhibited a period of growth from March 2022, peaking at 17,448 million US dollars in March 2024. Following this peak, a downward trend was observed through March 2025, where assets reached a period low of 13,086 million US dollars. A recovery phase followed, with assets climbing back to 15,757 million US dollars by June 2026.

Current Liability Trends

Current liabilities showed a gradual increase from 2,528 million US dollars in March 2022 to a peak of 3,686 million US dollars in September 2024. A sharp contraction occurred in the first quarter of 2025, with liabilities dropping to 2,489 million US dollars. Subsequently, liabilities trended upward again, reaching 3,244 million US dollars by June 2026.

Current Ratio Analysis

The current ratio fluctuated between a minimum of 4.12 in December 2024 and a maximum of 5.81 in June 2025. A notable decline in liquidity coverage was observed between June 2023 and December 2024, where the ratio dropped from 5.72 to 4.12. This was followed by a rapid spike in the first half of 2025, driven by a simultaneous decrease in current liabilities and a moderate increase in current assets. The ratio stabilized at 4.86 by June 2026, maintaining a highly conservative liquidity profile.

The liquidity profile exhibits a general downward trajectory in the quick ratio from early 2022 through late 2025, followed by a partial recovery in the first half of 2026. While the liquidity position remains robust throughout the analyzed period, the margin of safety has compressed significantly from its initial peak.

Quick Ratio Trends

The quick ratio declined from a high of 4.60 in March 2022 to a low of 2.17 in December 2025. This represents a sustained reduction in the ability to cover short-term obligations using only the most liquid assets. A recovery is observed in the most recent quarters, with the ratio climbing back to 2.93 by June 2026.

Quick Asset Fluctuations

Total quick assets remained relatively stable above 10 billion USD until late 2024. A sharp contraction occurred between December 2024 and March 2025, with assets falling from 9.299 billion USD to 6.865 billion USD. This period of depletion coincided with the lowest points of the quick ratio, although assets surged back to 9.521 billion USD by June 2026.

Current Liability Dynamics

Current liabilities showed a gradual upward trend from March 2022 (2.528 billion USD) to a peak in September 2024 (3.686 billion USD). A notable reduction in liabilities occurred in March 2025, dropping to 2.489 billion USD, which temporarily mitigated the impact of the simultaneous drop in quick assets. Liabilities subsequently rose again, reaching 3.244 billion USD by June 2026.

The liquidity profile shows a general downward trajectory in the cash ratio from March 2022 through December 2025, followed by a moderate recovery in the first half of 2026. While the ratio decreased from a peak of 3.89 to a low of 1.55, it consistently remained above 1.0 throughout the entire period, indicating that the entity maintained sufficient cash reserves to cover all current liabilities without relying on other current assets.

Cash Asset Trends

Total cash assets exhibited relative stability between $8.3 billion and $10.4 billion from March 2022 through March 2024. A significant contraction occurred starting in December 2024, with assets falling to a trough of approximately $4.88 billion by December 2025. A subsequent recovery is noted by June 2026, as cash assets rose to $7.00 billion.

Current Liabilities Analysis

Current liabilities trended upward from $2.53 billion in March 2022 to a peak of $3.69 billion in September 2024. A sharp decline to $2.49 billion was observed in the first half of 2025, which was followed by a steady increase back to $3.24 billion by June 2026.

Cash Ratio Interpretation

The cash ratio remained robustly high, above 3.0, for the majority of 2022 and 2023. A period of contraction began in late 2023, with the ratio falling to 2.01 by March 2025 and reaching its lowest point of 1.55 in December 2025. This decline was primarily driven by the substantial reduction in total cash assets. The ratio returned to 2.16 by June 2026, reflecting a restoration of liquidity levels.