Axcelis Technologies Inc (ACLS)

Axcelis Technologies Inc has displayed relatively strong liquidity ratios over the past five years. The current ratio, which measures the company's short-term liquidity and ability to cover its current liabilities with current assets, has shown a downward trend from 2019 to 2023, decreasing from 5.47 to 3.79. Despite the decline, the current ratio remains above 1, indicating that the company has more than enough current assets to cover its current liabilities.

The quick ratio, a more stringent measure of liquidity compared to the current ratio as it excludes inventory from current assets, also exhibits a decreasing trend over the period, decreasing from 3.43 in 2019 to 2.71 in 2023. This indicates that the company may have slightly less liquid assets to cover its short-term liabilities without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio as it only considers the most liquid assets (cash and cash equivalents) relative to current liabilities, has also shown a decreasing trend over the five-year period, decreasing from 2.21 in 2019 to 1.95 in 2023. This suggests the company may have reduced liquidity in terms of cash on hand to cover its immediate obligations.

Overall, while the liquidity ratios of Axcelis Technologies Inc have experienced a decline over the period, the company still maintains a healthy liquidity position with current, quick, and cash ratios well above 1. This indicates that Axcelis Technologies Inc has sufficient short-term liquidity to meet its current liabilities and operational needs.

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Additional liquidity measure

The cash conversion cycle of Axcelis Technologies Inc has shown fluctuations over the past five years, indicating changes in the company's efficiency in managing its working capital.

In 2019, the cash conversion cycle was at its highest at 300.31 days, suggesting a prolonged period between the company's expenditure on raw materials or production and the collection of cash from sales. This could indicate potential liquidity challenges or inefficiencies in inventory management and accounts receivable.

However, the company made improvements in the following years, with the cash conversion cycle decreasing to 248.09 days in 2020, 209.90 days in 2021, and further to 194.18 days in 2022. These reductions imply better working capital management, potentially through streamlining operations, optimizing inventory levels, and enhancing collections on sales.

In 2023, the cash conversion cycle increased slightly to 214.29 days, indicating a longer period for the conversion of cash from investing in operations to recovering it from sales. While this increase may raise some concerns, the cycle remained lower than the levels seen in 2019 and 2020, suggesting continued progress in working capital efficiency.

Overall, the trend in Axcelis Technologies Inc's cash conversion cycle reflects efforts to enhance operational efficiency and financial performance by shortening the time taken to convert investments in inventory and receivables into cash inflows.