Calculation
Current ratio | = | Current assets1 | ÷ | Current liabilities1 | |
---|---|---|---|---|---|
Dec 31, 2015 | 1.17 | = | 15,063) | ÷ | 12,885) |
Dec 31, 2014 | 1.34 | = | 15,733) | ÷ | 11,710) |
Dec 31, 2013 | 1.46 | = | 17,278) | ÷ | 11,799) |
Dec 31, 2012 | 1.18 | = | 12,209) | ÷ | 10,304) |
Dec 31, 2011 | 1.12 | = | 11,583) | ÷ | 10,376) |
Dec 31, 2010 | 1.04 | = | 9,783) | ÷ | 9,378) |
Dec 31, 2009 | 2.05 | = | 10,538) | ÷ | 5,148) |
Dec 31, 2008 | 2.04 | = | 10,665) | ÷ | 5,218) |
Dec 31, 2007 | 2.28 | = | 10,053) | ÷ | 4,408) |
Dec 31, 2006 | 1.68 | = | 6,521) | ÷ | 3,881) |
Dec 31, 2005 | 1.79 | = | 6,574) | ÷ | 3,674) |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in millions
The financial analysis over the given period reveals several noteworthy trends in the current assets, current liabilities, and current ratio.
- Current Assets
- Current assets displayed a general upward trend from 2005 to 2013, beginning at 6,574 million USD and rising to a peak of 17,278 million USD in 2013. Afterward, there was a decline in the subsequent years, decreasing to 15,733 million USD in 2014 and further to 15,063 million USD in 2015. This growth phase indicates an expansion in liquid resources or assets expected to be converted into cash within the operating cycle, followed by a slight contraction in the final years.
- Current Liabilities
- Current liabilities also increased markedly over the period, starting at 3,674 million USD in 2005 and almost tripling to 12,885 million USD by 2015. Notably, there was a significant jump between 2009 and 2010, where current liabilities surged from 5,148 million USD to 9,378 million USD, indicating a substantial rise in short-term financial obligations. After 2010, the liabilities continued to grow but at a more moderate rate.
- Current Ratio
- The current ratio, which measures liquidity by comparing current assets to current liabilities, exhibited considerable fluctuation. Initially, the ratio was relatively high, starting at 1.79 in 2005 and reaching a peak of 2.28 in 2007, indicating strong short-term financial health. However, from 2009 onward, the ratio declined sharply to 1.04 in 2010, aligning with the steep increase in current liabilities. Although there was a partial recovery in the following years, rising to 1.46 in 2013, the ratio never returned to previous peak levels and fell again to 1.17 by 2015. This pattern suggests increasing pressure on liquidity and potential challenges in meeting short-term obligations as liabilities grew faster than assets.
Overall, the data suggest that while current assets increased substantially over the analyzed period, the more rapid growth of current liabilities adversely affected liquidity, as evidenced by the declining current ratio post-2007. The sharp increase in current liabilities around 2010 is particularly significant, indicating potential changes in the company's working capital management or short-term financing strategy. The modest improvement in the current ratio after 2010 was insufficient to restore the previously strong liquidity position.
Comparison to Competitors
EMC Corp. | 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. | |
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec 31, 2015 | 1.17 | 1.65 | 3.66 | 2.44 | 3.37 | 2.58 | 3.90 | 2.38 | 2.20 | 6.38 | 3.62 | 2.77 |
Dec 31, 2014 | 1.34 | 1.90 | 5.38 | 2.47 | 3.77 | 1.73 | 5.12 | 3.02 | 2.13 | 5.95 | 3.73 | 2.92 |
Dec 31, 2013 | 1.46 | 1.78 | 9.59 | 2.31 | 4.30 | 2.36 | 5.05 | 2.70 | 2.16 | 4.89 | 3.75 | 2.92 |
Dec 31, 2012 | 1.18 | 1.62 | 8.94 | 2.25 | 4.89 | 2.43 | 4.83 | 3.09 | 2.57 | 4.20 | 2.95 | 2.40 |
Dec 31, 2011 | 1.12 | 1.82 | 8.35 | 3.71 | 3.98 | 2.15 | 4.17 | 4.79 | 2.35 | 3.42 | 2.70 | 2.24 |
Dec 31, 2010 | 1.04 | 2.15 | 5.41 | 2.34 | 1.92 | 3.39 | 3.67 | 3.14 | 2.34 | 3.16 | 2.22 | 3.56 |
Dec 31, 2009 | 2.05 | 1.93 | 6.44 | 2.93 | 1.36 | 2.79 | 4.25 | 3.51 | 1.77 | 2.78 | 4.47 | 3.85 |
Dec 31, 2008 | 2.04 | 1.07 | 3.67 | 2.26 | — | 2.54 | 3.19 | 3.01 | 2.36 | 2.99 | 5.12 | 3.78 |
Dec 31, 2007 | 2.28 | 1.45 | 3.61 | 2.78 | — | 2.79 | 3.03 | 2.11 | 2.58 | 3.18 | 3.91 | 3.42 |
Dec 31, 2006 | 1.68 | 1.39 | 6.13 | 2.50 | — | 2.15 | 3.53 | 3.01 | 3.07 | 3.53 | 4.96 | 3.78 |
Dec 31, 2005 | 1.79 | 1.95 | 4.56 | 5.35 | — | 2.30 | 3.44 | 3.28 | 2.99 | 3.10 | 7.28 | 3.92 |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Semiconductors & Semiconductor Equipment)
EMC Corp., current ratio, long-term trends, comparison to sector (semiconductors & semiconductor equipment)
EMC Corp. | Semiconductors & Semiconductor Equipment | |
---|---|---|
Dec 31, 2015 | 1.17 | 2.82 |
Dec 31, 2014 | 1.34 | 2.58 |
Dec 31, 2013 | 1.46 | 2.87 |
Dec 31, 2012 | 1.18 | 2.76 |
Dec 31, 2011 | 1.12 | 2.67 |
Dec 31, 2010 | 1.04 | 2.89 |
Dec 31, 2009 | 2.05 | 3.00 |
Dec 31, 2008 | 2.04 | 2.79 |
Dec 31, 2007 | 2.28 | 2.80 |
Dec 31, 2006 | 1.68 | 2.71 |
Dec 31, 2005 | 1.79 | 3.22 |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Information Technology)
EMC Corp. | Information Technology | |
---|---|---|
Dec 31, 2015 | 1.17 | 2.03 |
Dec 31, 2014 | 1.34 | 1.97 |
Dec 31, 2013 | 1.46 | 2.20 |
Dec 31, 2012 | 1.18 | 2.07 |
Dec 31, 2011 | 1.12 | 2.11 |
Dec 31, 2010 | 1.04 | 2.01 |
Dec 31, 2009 | 2.05 | 2.03 |
Dec 31, 2008 | 2.04 | 1.80 |
Dec 31, 2007 | 2.28 | 1.78 |
Dec 31, 2006 | 1.68 | 1.85 |
Dec 31, 2005 | 1.79 | 2.01 |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).