Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Amphenol Corp., liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Current ratio | 2.17 | 2.42 | 2.43 | 2.38 | 1.97 | |
| Quick ratio | 1.36 | 1.52 | 1.51 | 1.60 | 1.24 | |
| Cash ratio | 0.53 | 0.54 | 0.51 | 0.75 | 0.43 |
Based on: 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), 10-K (reporting date: 2019-12-31).
The liquidity position demonstrates a period of significant strengthening following 2019, followed by a phase of relative stability and a marginal contraction toward the end of the observed period.
- Current Ratio
- An upward trend is observed from 2019 to 2021, with the ratio rising from 1.97 to a peak of 2.43. Following a period of stability in 2022 at 2.42, the ratio declined to 2.17 in 2023. Despite this recent decrease, the ratio remains well above 2.0, indicating a strong capacity to cover short-term obligations with current assets.
- Quick Ratio
- The quick ratio increased from 1.24 in 2019 to 1.60 in 2020. It remained relatively consistent through 2021 and 2022, recording values of 1.51 and 1.52 respectively, before decreasing to 1.36 in 2023. The fact that this ratio consistently remains above 1.0 suggests that immediate liabilities can be satisfied without reliance on inventory liquidation.
- Cash Ratio
- A sharp increase is noted in 2020, where the cash ratio rose to 0.75 from 0.43 in 2019. A correction occurred in 2021, with the ratio dropping to 0.51, after which it stabilized between 0.53 and 0.54 through 2023. This indicates a consistent maintenance of highly liquid assets to cover approximately half of all current liabilities.
The overall trend reveals that the organization significantly bolstered its liquidity buffers starting in 2020. While a slight downward trajectory is evident across all three metrics in 2023, the levels remain substantially higher than those recorded in 2019, reflecting a robust short-term financial position.
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Current Ratio
Amphenol Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 6,835,300) | 6,479,100) | 5,958,200) | 5,490,800) | 4,211,200) | |
| Current liabilities | 3,152,700) | 2,676,100) | 2,447,100) | 2,304,300) | 2,132,700) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 2.17 | 2.42 | 2.43 | 2.38 | 1.97 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Apple Inc. | 0.99 | 0.88 | 1.07 | — | — | |
| Arista Networks Inc. | 4.39 | 4.29 | 4.34 | — | — | |
| Cisco Systems Inc. | 1.38 | 1.43 | 1.49 | — | — | |
| Dell Technologies Inc. | 0.82 | 0.80 | 0.80 | — | — | |
| Lumentum Holdings Inc. | 4.38 | 4.38 | 3.67 | — | — | |
| Super Micro Computer Inc. | 2.31 | 1.91 | 1.93 | — | — | |
| Current Ratio, Sector | ||||||
| Technology Hardware & Equipment | 1.05 | 0.96 | 1.09 | — | — | |
| Current Ratio, Industry | ||||||
| Information Technology | 1.41 | 1.37 | 1.55 | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= 6,835,300 ÷ 3,152,700 = 2.17
2 Click competitor name to see calculations.
The analysis of liquidity indicators from 2019 to 2023 reveals a sustained capacity to meet short-term obligations, although the rate of liquidity growth decelerated in the final year of the period.
- Current Assets Trend
- Current assets exhibited consistent annual growth, increasing from 4,211,200 thousand US$ in 2019 to 6,835,300 thousand US$ by the end of 2023. This represents a total increase of approximately 62% over the five-year period, indicating a significant expansion of the company's short-term resource base.
- Current Liabilities Trend
- Current liabilities rose steadily from 2,132,700 thousand US$ in 2019 to 3,152,700 thousand US$ in 2023. While growth was moderate between 2019 and 2022, a more pronounced acceleration occurred in 2023, where liabilities increased by approximately 17.8% compared to the previous year.
- Current Ratio Analysis
- The current ratio improved from 1.97 in 2019 to a peak of 2.43 in 2021, reflecting a strengthening of the liquidity cushion. The ratio remained stable at 2.42 in 2022 before declining to 2.17 in 2023. This recent contraction is attributable to current liabilities growing at a faster pace than current assets during the 2023 fiscal year.
Overall, the liquidity profile remains robust, as the current ratio has consistently stayed above 2.0 since 2020, suggesting a substantial margin of safety for meeting current obligations.
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Quick Ratio
Amphenol Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 1,475,000) | 1,373,100) | 1,197,100) | 1,702,000) | 891,200) | |
| Short-term investments | 185,200) | 61,100) | 44,300) | 36,100) | 17,400) | |
| Accounts receivable, less allowance for doubtful accounts | 2,618,400) | 2,631,300) | 2,454,800) | 1,951,600) | 1,736,400) | |
| Total quick assets | 4,278,600) | 4,065,500) | 3,696,200) | 3,689,700) | 2,645,000) | |
| Current liabilities | 3,152,700) | 2,676,100) | 2,447,100) | 2,304,300) | 2,132,700) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 1.36 | 1.52 | 1.51 | 1.60 | 1.24 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Apple Inc. | 0.84 | 0.71 | 0.91 | — | — | |
| Arista Networks Inc. | 3.16 | 3.05 | 3.54 | — | — | |
| Cisco Systems Inc. | 1.13 | 1.16 | 1.32 | — | — | |
| Dell Technologies Inc. | 0.52 | 0.49 | 0.59 | — | — | |
| Lumentum Holdings Inc. | 3.57 | 3.92 | 3.25 | — | — | |
| Super Micro Computer Inc. | 1.16 | 0.75 | 0.72 | — | — | |
| Quick Ratio, Sector | ||||||
| Technology Hardware & Equipment | 0.84 | 0.73 | 0.90 | — | — | |
| Quick Ratio, Industry | ||||||
| Information Technology | 1.12 | 1.09 | 1.30 | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 4,278,600 ÷ 3,152,700 = 1.36
2 Click competitor name to see calculations.
The liquidity position of the organization exhibits a generally robust profile over the five-year period ending December 31, 2023, characterized by a consistent ability to cover short-term obligations using liquid assets. While there are fluctuations in the efficiency of this coverage, the quick ratio has remained above the 1.0 threshold throughout the analyzed period, indicating a stable short-term financial position.
- Total Quick Assets Trend
- A sustained upward trajectory is observed in total quick assets, which increased from US$ 2,645,000 thousand in 2019 to US$ 4,278,600 thousand in 2023. The most significant expansion occurred between 2019 and 2020, during which quick assets rose by approximately 39.5%, suggesting a substantial accumulation of highly liquid resources.
- Current Liabilities Growth
- Current liabilities have demonstrated a steady annual increase, rising from US$ 2,132,700 thousand in 2019 to US$ 3,152,700 thousand in 2023. The growth rate in liabilities accelerated in the final year of the period, specifically between 2022 and 2023, which contributed to a compression of the liquidity margin.
- Quick Ratio Dynamics
- The quick ratio experienced an initial sharp increase from 1.24 in 2019 to a peak of 1.60 in 2020. Following this peak, the ratio remained relatively stable, fluctuating slightly between 1.51 and 1.52 during 2021 and 2022. A decline to 1.36 was recorded in 2023, a result of the growth in current liabilities outpacing the growth in quick assets during that fiscal year.
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Cash Ratio
Amphenol Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 1,475,000) | 1,373,100) | 1,197,100) | 1,702,000) | 891,200) | |
| Short-term investments | 185,200) | 61,100) | 44,300) | 36,100) | 17,400) | |
| Total cash assets | 1,660,200) | 1,434,200) | 1,241,400) | 1,738,100) | 908,600) | |
| Current liabilities | 3,152,700) | 2,676,100) | 2,447,100) | 2,304,300) | 2,132,700) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.53 | 0.54 | 0.51 | 0.75 | 0.43 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Apple Inc. | 0.42 | 0.31 | 0.50 | — | — | |
| Arista Networks Inc. | 2.62 | 2.34 | 3.07 | — | — | |
| Cisco Systems Inc. | 0.84 | 0.75 | 0.93 | — | — | |
| Dell Technologies Inc. | 0.17 | 0.17 | 0.26 | — | — | |
| Lumentum Holdings Inc. | 3.18 | 3.56 | 2.93 | — | — | |
| Super Micro Computer Inc. | 0.32 | 0.18 | 0.24 | — | — | |
| Cash Ratio, Sector | ||||||
| Technology Hardware & Equipment | 0.45 | 0.35 | 0.51 | — | — | |
| Cash Ratio, Industry | ||||||
| Information Technology | 0.71 | 0.67 | 0.89 | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 1,660,200 ÷ 3,152,700 = 0.53
2 Click competitor name to see calculations.
The analysis of liquidity metrics from 2019 to 2023 reveals a period of volatility in cash holdings contrasted with a steady, linear increase in short-term obligations.
- Cash Ratio Trends
- A significant peak in the cash ratio occurred in 2020, rising to 0.75 from a 2019 baseline of 0.43. This spike was primarily driven by a substantial surge in total cash assets. Following this peak, the ratio experienced a correction in 2021 to 0.51 and subsequently remained stable, fluctuating minimally between 0.51 and 0.54 through the end of 2023.
- Current Liabilities Trajectory
- Current liabilities have exhibited a consistent year-over-year increase throughout the observed period. Total obligations rose from approximately 2.13 billion US dollars in 2019 to 3.15 billion US dollars by December 31, 2023, indicating a progressive expansion of short-term financial commitments.
- Liquidity Position Analysis
- Total cash assets ended the period at 1.66 billion US dollars, a significant increase from the 908.6 million US dollars reported in 2019. However, because the growth in current liabilities occurred concurrently, the cash ratio has not returned to its 2020 high. The stabilization of the ratio above 0.50 since 2021 suggests a consistent strategy for maintaining immediate liquidity, although cash reserves alone are insufficient to cover the total amount of current liabilities in any of the reported years.
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