Axcelis Technologies Inc (ACLS)

Axcelis Technologies Inc has shown a generally healthy liquidity position over the last five years as evidenced by its Current Ratio, Quick Ratio, and Cash Ratio.

The Current Ratio, which measures the company's ability to meet short-term obligations with its current assets, has shown a declining trend from 5.58 in 2020 to 3.79 in 2023 before slightly increasing to 5.41 in 2024. While the ratios are declining, they still indicate that Axcelis Technologies Inc has sufficient current assets to cover its current liabilities.

The Quick Ratio, also known as the Acid-Test Ratio, provides a stricter measure of a company's liquidity by excluding inventory from current assets. Axcelis Technologies Inc's Quick Ratio has followed a similar trend as the Current Ratio, decreasing from 2.41 in 2020 to 1.78 in 2023 before increasing to 2.75 in 2024. This indicates that the company may have a more limited ability to cover its short-term obligations without relying on inventory.

The Cash Ratio, the most stringent measure of liquidity, which only considers cash and cash equivalents, has also displayed a similar trend. The ratio decreased from 2.41 in 2020 to 1.78 in 2023 before rising to 2.75 in 2024, showing that Axcelis Technologies Inc has maintained healthy cash reserves relative to its current liabilities.

In summary, while there has been a decline in liquidity ratios over the years, Axcelis Technologies Inc's liquidity position remains strong overall, with the company having sufficient current assets, excluding inventory, and cash to cover its short-term obligations.

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Additional liquidity measure

The cash conversion cycle of Axcelis Technologies Inc has been fluctuating over the years based on the provided data. As of December 31, 2020, the cash conversion cycle was 213.04 days, indicating that it took the company 213.04 days to convert its investments in inventory and other resources into cash inflows.

Over the next few years, the cash conversion cycle showed a decreasing trend, reaching 189.29 days by December 31, 2021, and further declining to 170.74 days by December 31, 2022. This suggests that the company has been able to optimize its working capital management and improve the efficiency of its operations in terms of converting resources into cash.

However, by December 31, 2023, the cash conversion cycle slightly increased to 174.98 days, and then further increased to 182.90 days by December 31, 2024. This uptick in the cash conversion cycle may indicate potential challenges in managing working capital efficiently, possibly due to factors such as changes in supplier payment terms, inventory management issues, or slower accounts receivable collection.

In summary, while Axcelis Technologies Inc has shown improvements in its cash conversion cycle over the years, the recent increase in the cycle duration highlights the importance of closely monitoring working capital dynamics to ensure operational efficiency and cash flow optimization in the future.