Texas Instruments Inc. (NASDAQ:TXN)

The liquidity position, as indicated by the current, quick, and cash ratios, demonstrates a generally decreasing trend over the observed period, with some quarterly fluctuations. Initial values are relatively high, but a consistent decline is apparent, particularly in the quick and cash ratios. A slight recovery is observed in the most recent quarters, but levels remain below those seen in the earlier part of the period.

Current Ratio

The current ratio begins at 5.54 and generally decreases to a low of 4.12 before showing some improvement, reaching 5.26 in the most recent quarter. While remaining above 4.0 throughout the period, the overall trend suggests a diminishing ability to cover short-term liabilities with short-term assets. The most significant decline occurs between September 30, 2022, and December 31, 2022, followed by a period of relative stability before another decline and subsequent recovery.

Quick Ratio

The quick ratio exhibits a more pronounced downward trend than the current ratio, starting at 4.60 and falling to 2.17. This indicates a decreasing capacity to meet short-term obligations with the most liquid assets, excluding inventory. The decline is relatively steady, with a sharper drop observed between September 30, 2022, and December 31, 2022. A modest recovery is visible in the latest reported quarters, but the ratio remains considerably lower than its initial value.

Cash Ratio

The cash ratio demonstrates the most significant decline of the three ratios, beginning at 3.89 and decreasing to 1.55. This suggests a substantial reduction in the proportion of current assets held as cash. The trend is generally consistent, with a notable decrease between June 30, 2023, and December 31, 2023. Similar to the other ratios, a slight increase is observed in the most recent quarters, but the ratio remains at a lower level than previously recorded.

The consistent decline in all three liquidity ratios suggests a potential shift in asset allocation or an increase in short-term liabilities. While the ratios remain above one, indicating a general ability to cover immediate obligations, the downward trajectory warrants further investigation to understand the underlying causes and potential implications for the company’s financial health.

The current ratio exhibited fluctuations over the observed period, generally indicating a healthy, though evolving, short-term liquidity position. Initial values were relatively high, followed by a period of decline, and then a subsequent recovery before stabilizing at a lower level. A detailed examination reveals specific trends and patterns.

Overall Trend

The current ratio began at 5.54 and generally decreased through the end of 2022, reaching a low of 4.55. It then increased through the first half of 2023, peaking at 5.72. Following this peak, the ratio experienced another decline, stabilizing between 4.31 and 5.26 from late 2023 through mid-2025. The most recent quarters show a slight downward trend, ending at 4.35.

Initial Decline (2022)

From March 31, 2022, to December 31, 2022, the current ratio decreased from 5.54 to 4.70. This decline occurred alongside increases in both current assets and current liabilities, but the growth in liabilities was proportionally greater. This suggests a potential shift in the company’s working capital management or an increase in short-term obligations.

Recovery and Subsequent Decline (2023-2024)

The ratio experienced a recovery in the first half of 2023, reaching 5.72 in June 2023. This improvement was driven by a more substantial increase in current assets compared to current liabilities. However, the second half of 2023 and the first half of 2024 saw a renewed decline, falling to 4.62 by June 2024. This period was characterized by increases in current liabilities outpacing the growth in current assets.

Recent Stability and Slight Decline (2024-2025)

From September 2024 through December 2025, the current ratio remained relatively stable, fluctuating between 4.12 and 5.26. The latest two quarters, however, indicate a slight downward trend, with the ratio decreasing from 4.45 to 4.35. This suggests a potential emerging pattern of increasing short-term obligations relative to current assets.

In summary, the current ratio demonstrates a dynamic relationship between current assets and current liabilities. While consistently above 4.0, indicating a generally strong ability to cover short-term obligations, the observed fluctuations warrant continued monitoring to understand the underlying drivers and potential implications for the company’s liquidity position.

The quick ratio exhibited a generally declining trend over the observed period, though with notable fluctuations. Initially strong, the ratio decreased from 4.60 in March 2022 to 3.12 in December 2022. A period of relative stability and slight improvement followed through June 2023, reaching 4.24. However, a more pronounced downward trend materialized in the latter half of 2023 and continued into 2025, culminating in a ratio of 2.17 by December 2025.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The quick ratio began at a high of 4.60 and experienced a consistent, though moderate, decline. This suggests a relative decrease in the company’s ability to meet its short-term obligations with its most liquid assets during this timeframe. The decrease in the ratio coincided with an increase in current liabilities.

Stabilization and Fluctuation (Jan 1, 2023 – Jun 30, 2023)

The first half of 2023 saw a stabilization and slight increase in the quick ratio, peaking at 4.24 in June 2023. This indicates a temporary improvement in short-term liquidity, potentially due to asset management or liability adjustments. However, this improvement was not sustained.

Accelerated Decline (Jul 1, 2023 – Dec 31, 2025)

From September 2023 onwards, the quick ratio demonstrated a clear and accelerating downward trend. The ratio fell from 4.12 to 2.17 over this period. This decline appears to be driven by a combination of decreasing quick assets and increasing current liabilities. The most significant drop occurred between December 2023 and March 2025, indicating a substantial shift in the company’s short-term liquidity position. The rate of decline slowed slightly between September 2025 and December 2025.

Asset and Liability Dynamics

Total quick assets generally decreased over the entire period, with a particularly sharp reduction observed from December 2022 to December 2025. Current liabilities, while fluctuating, generally increased, contributing to the declining quick ratio. The increase in current liabilities was most pronounced between September 2023 and June 2024.

Overall, the observed trend suggests a weakening of the company’s short-term liquidity position. While the initial ratios were strong, the consistent decline warrants further investigation into the underlying causes, including asset utilization and liability management practices.

The cash ratio exhibited a generally declining trend over the observed period, spanning from March 31, 2022, to December 31, 2025. Initial values indicated a strong liquidity position, but subsequent quarters demonstrate a weakening ability to cover current liabilities with solely cash and cash equivalents.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The cash ratio began at 3.89 and decreased to 3.04 over this period. While decreasing, the ratio remained above 3.0, indicating a substantial capacity to meet short-term obligations with available cash. Fluctuations were relatively minor quarter-to-quarter.

Stabilization and Subsequent Decline (Mar 31, 2023 – Jun 30, 2023)

A slight stabilization occurred in the first half of 2023, with the ratio increasing from 3.29 to 3.52. However, this was followed by a more pronounced decline in the latter half of the year, falling to 2.58 by December 31, 2023. This represents the first time the ratio fell below 3.0 during the analyzed timeframe.

Continued Weakening (Mar 31, 2024 – Dec 31, 2025)

The downward trend continued into 2024 and 2025. The cash ratio decreased from 2.93 in March 2024 to 1.55 by December 2025. This indicates a significant reduction in the proportion of current liabilities covered by cash. The lowest value observed was 1.55, suggesting a considerably diminished immediate liquidity position.

Total Cash Assets and Current Liabilities

The decline in the cash ratio is attributable to a combination of factors. Total cash assets decreased from approximately US$9.8 billion in March 2022 to US$4.9 billion in March 2025. Simultaneously, current liabilities generally remained stable, fluctuating between US$2.5 billion and US$3.7 billion, before settling around US$3.1 billion by the end of the period. The greater reduction in cash assets compared to the relatively stable current liabilities drove the overall decrease in the cash ratio.

In summary, the company’s cash ratio experienced a consistent decline throughout the analyzed period, indicating a weakening short-term liquidity position. The reduction in cash holdings, coupled with relatively consistent current liabilities, contributed to this trend.