EMC Corp. (NYSE:EMC)

Current Ratio

The current ratio shows an overall increasing trend from 1.12 in 2011 to a peak of 1.46 in 2013, indicating an improvement in the company's ability to cover its short-term liabilities with short-term assets during that period. However, after 2013, the ratio declines to 1.34 in 2014 and further to 1.17 in 2015, suggesting a reduced liquidity position compared to the peak year, although it remains above the initial 2011 level.

Quick Ratio

The quick ratio follows a similar pattern to the current ratio, starting at 0.89 in 2011 and increasing steadily to 1.23 by the end of 2013. This indicates stronger liquidity excluding inventory, which is generally considered less liquid. From 2013 onwards, the quick ratio declines to 1.09 in 2014 and slightly decreases again to 1.03 in 2015, showing a decrease in highly liquid assets relative to current liabilities after the peak year, but it still indicates a better position than at the beginning of the period.

Cash Ratio

The cash ratio demonstrates a different pattern, starting at 0.61 in 2011 and remaining nearly flat at 0.60 in 2012. It then increases significantly to 0.90 in 2013, reflecting a higher proportion of cash and cash equivalents relative to current liabilities. After 2013, there is a noticeable decline to 0.71 in 2014, with a slight increase to 0.72 in 2015. Although the cash ratio decreases after its peak, it remains above the initial years' levels, suggesting improved cash liquidity compared to the early period.

The analysis of current assets and current liabilities over the five-year period reveals several notable trends.

Current Assets

Current assets showed growth from 2011 to 2013, increasing from 11,583 million US dollars in 2011 to 17,278 million US dollars in 2013. However, after reaching this peak, current assets declined to 15,733 million in 2014 and further to 15,063 million in 2015. This represents a reduction of approximately 13% from the 2013 high over the subsequent two years.

Current Liabilities

Current liabilities remained relatively stable from 2011 through 2014, fluctuating slightly between 10,304 million and 11,799 million US dollars. In 2015, current liabilities increased noticeably to 12,885 million US dollars, the highest level recorded during this period. This increase follows a relatively flat trend in the previous years.

Current Ratio

The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, showed improvement from 1.12 in 2011 to a peak of 1.46 in 2013. This suggests a strengthening liquidity position by mid-period. From 2013 onward, the current ratio declined to 1.34 in 2014 and further to 1.17 in 2015, reflecting a weakening in the company’s liquidity and a reduced cushion to cover short-term liabilities.

In summary, the company experienced growth in current assets up to 2013, accompanied by a corresponding increase in liquidity. However, from 2014 onward, current assets decreased while liabilities increased, leading to a deterioration in the current ratio. This indicates potential challenges in maintaining liquidity and managing working capital effectively in the later years of the period analyzed.

Total Quick Assets

The total quick assets demonstrated a positive growth trend from 2011 to 2015. Beginning at 9,256 million USD in 2011, the value increased steadily, peaking at 14,525 million USD in 2013. Although there was a decline in 2014 to 12,734 million USD, the figure recovered slightly in 2015 to 13,252 million USD. Overall, total quick assets grew by approximately 43% over the five-year period.

Current Liabilities

Current liabilities exhibited an upward trend across the same period. Starting at 10,376 million USD in 2011, liabilities remained relatively stable through 2012 and 2014, fluctuating between 10,304 million USD and 11,710 million USD. A significant increase occurred in 2015, with current liabilities rising to 12,885 million USD, marking a total growth of around 24% over five years.

Quick Ratio

The quick ratio improved from 0.89 in 2011 to a peak of 1.23 in 2013, reflecting an enhanced short-term liquidity position during this timeframe. However, it declined in the subsequent years to 1.09 in 2014 and further to 1.03 in 2015, indicating a slight weakening in liquidity despite remaining above the 2011 level. The ratio staying close to or above one suggests the company maintained sufficient quick assets to cover current liabilities throughout the period.

Total cash assets

The total cash assets show variability over the five-year period. Starting at $6,318 million in 2011, the amount slightly decreased to $6,167 million in 2012. There was a significant increase in 2013, reaching $10,664 million, followed by a decrease to $8,321 million in 2014. By 2015, the cash assets rose again to $9,275 million. Overall, cash assets experienced growth with fluctuations rather than a steady trend.

Current liabilities

Current liabilities demonstrate a generally increasing trend throughout the period. Beginning at $10,376 million in 2011, there was a minor decline to $10,304 million in 2012. From 2012 onwards, liabilities consistently rose, reaching $11,799 million in 2013, slightly decreasing to $11,710 million in 2014, and then increasing again to $12,885 million by 2015. This indicates an overall upward movement in short-term obligations.

Cash ratio

The cash ratio, which measures the company's ability to cover current liabilities with cash, reflects moderate fluctuations. It started at 0.61 in 2011, slightly decreased to 0.6 in 2012, then substantially increased to 0.9 in 2013, indicating improved liquidity. The ratio decreased again in 2014 to 0.71, and marginally increased to 0.72 in 2015. Despite the oscillations, the cash ratio remains below 1 in all years except 2013, suggesting that cash assets alone may not fully cover current liabilities consistently.