Adobe Systems Incorporated (ADBE)
Liquidity ratios
| Nov 30, 2024 | Nov 29, 2024 | Dec 1, 2023 | Nov 30, 2023 | Dec 2, 2022 | |
|---|---|---|---|---|---|
| Current ratio | 1.07 | 1.07 | 1.34 | 1.34 | 1.11 |
| Quick ratio | 0.75 | 0.95 | 1.22 | 0.95 | 1.00 |
| Cash ratio | 0.75 | 0.75 | 0.95 | 0.95 | 0.75 |
Adobe Systems Incorporated's liquidity ratios have shown variations over the past few years.
1. Current Ratio:
- The current ratio measures the company's ability to meet its short-term obligations using its current assets.
- From 2022 to 2024, Adobe's current ratio fluctuated, starting at 1.11 and reaching 1.34 in 2023, but then dropping back to 1.07 in 2024.
- Generally, a current ratio above 1 indicates that the company can cover its current liabilities with its current assets.
2. Quick Ratio:
- The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets.
- Adobe's quick ratio ranged between 0.75 and 1.22 during the period.
- A quick ratio of 1 or higher is considered healthy, indicating the company has sufficient liquid assets to cover its short-term liabilities.
3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, considering only cash and cash equivalents compared to current liabilities.
- Adobe's cash ratio remained relatively stable at 0.75 or 0.95 over the period.
- A higher cash ratio indicates a stronger ability to cover short-term liabilities with cash on hand.
In conclusion, Adobe Systems Incorporated maintained a reasonable level of liquidity over the period, as shown by its current, quick, and cash ratios. However, the fluctuations in these ratios suggest a need for continuous monitoring of the company's liquidity position to ensure it can meet its short-term obligations effectively.
See also:
Additional liquidity measure
| Nov 30, 2024 | Nov 29, 2024 | Dec 1, 2023 | Nov 30, 2023 | Dec 2, 2022 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | -20.71 | -6.86 | 0.00 | -20.98 |
The cash conversion cycle of Adobe Systems Incorporated has shown some fluctuations over the years. As of December 2, 2022, the company had a negative cash conversion cycle of -20.98 days, which indicates that it was able to convert its inventory into cash relatively quickly. This trend continued into November 30, 2023, where the cash conversion cycle was recorded as 0.00 days, implying that the company was able to collect cash from its customers almost immediately after making sales.
However, by December 1, 2023, the cash conversion cycle had decreased to -6.86 days, suggesting a slight delay in the conversion of inventory to cash. This trend reversed in the following year, with a cash conversion cycle of -20.71 days on November 29, 2024. This indicates that the company was once again able to efficiently convert its inventory into cash.
Overall, Adobe Systems Incorporated has maintained a generally negative cash conversion cycle, indicating effective management of its working capital and efficient cash flow processes.