ADEIA CORP (ADEA)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Current ratio 3.53 3.42 3.00 2.23 2.02 2.68 2.33 2.12 1.55 2.46 2.74 2.71 2.74 2.49 2.89 2.90
Quick ratio 3.46 3.38 2.92 2.18 2.00 2.61 2.25 2.04 1.50 2.28 2.56 2.52 1.97 2.30 2.70 2.73
Cash ratio 1.57 1.35 1.35 1.01 0.88 1.05 1.03 0.88 0.71 1.23 1.37 1.39 0.81 1.16 1.15 1.29

ADEIA CORP's liquidity ratios, as represented by the current ratio, quick ratio, and cash ratio, have exhibited fluctuations over the period from March 31, 2021, to December 31, 2024.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, saw a general decline from September 2022 to December 2022 but recovered in the subsequent periods. However, a significant drop is noted in the current ratio in the last quarter of 2024, indicating a potential liquidity strain as the ratio fell to 1.55.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, displayed a similar trend to the current ratio with a decline in the same period. The quick ratio fell to 1.50 by December 31, 2022, signaling a potential challenge in meeting short-term obligations without relying on inventory.

In terms of the cash ratio, which indicates the company's ability to cover its current liabilities with cash and cash equivalents, the values fluctuated but generally remained above 1, suggesting a relatively healthy cash position. Notably, the cash ratio increased steadily from September 2023 to December 2024, indicating an improvement in the company's ability to cover its short-term liabilities with cash alone.

Overall, while ADEIA CORP maintained a relatively strong liquidity position during most of the period under consideration, the significant decline in the current ratio and quick ratio by the end of 2024 raises concerns about its short-term liquidity management and ability to meet immediate financial obligations.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Cash conversion cycle days 118.51 139.83 107.91 103.32 89.85 114.88 83.97 97.44 104.72 193.14 158.36 116.58 108.79 116.11 141.32 148.94

The cash conversion cycle of ADEIA CORP has shown fluctuations over the past few years. The cash conversion cycle, which represents the time taken to convert inventory and receivables into cash, is a key indicator of a company's efficiency in managing its working capital.

From the data provided:

- The company's cash conversion cycle was initially high in March 31, 2021, at 148.94 days, indicating a longer period to convert inventory and receivables into cash.
- There was a steady improvement in the cash conversion cycle through September 30, 2022, reaching a low of 97.44 days on March 31, 2023. This suggests that the company was able to manage its working capital more efficiently during this period.
- However, from June 30, 2023, to September 30, 2024, the cash conversion cycle started to increase again, reaching a peak of 193.14 days on September 30, 2022. This increase could indicate potential issues with managing inventory or collecting receivables efficiently.
- The cash conversion cycle decreased slightly to 118.51 days by December 31, 2024, but it still remained higher compared to the lows seen earlier.

Overall, the fluctuations in ADEIA CORP's cash conversion cycle indicate some inconsistency in managing working capital efficiency over the periods analyzed. The company may need to focus on optimizing its inventory management and receivables collection processes to improve its overall cash conversion cycle and enhance its working capital management.