ADEIA CORP (ADEA)
Liquidity ratios
| 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 | 2.02 | 2.68 | 2.33 | 2.12 | 1.55 | 2.46 | 2.74 | 2.71 | 2.74 | 2.49 | 2.89 | 2.90 | 2.43 | 2.48 | 2.54 |
| Quick ratio | 2.00 | 2.61 | 2.25 | 2.04 | 1.50 | 2.28 | 2.56 | 2.52 | 1.97 | 2.30 | 2.70 | 2.73 | 2.27 | 2.33 | 2.80 |
| Cash ratio | 0.88 | 1.05 | 1.03 | 0.88 | 0.71 | 1.23 | 1.37 | 1.39 | 0.81 | 1.16 | 1.15 | 1.29 | 1.16 | 1.00 | 1.36 |
Based on the provided data on ADEIA CORP's liquidity ratios, we can observe the following trends:
1. Current Ratio: The current ratio measures the company's ability to meet its short-term obligations with its current assets. ADEIA CORP's current ratio has fluctuated over the past few quarters, ranging from a low of 1.55 to a high of 2.74. Overall, the current ratio appears to have been relatively stable, maintaining a healthy range above 2. This indicates that the company has a comfortable level of current assets to cover its current liabilities.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. ADEIA CORP's quick ratio has followed a similar pattern to the current ratio, staying above 2 for most quarters. This suggests that the company has a strong ability to meet its short-term obligations using its most liquid assets.
3. Cash Ratio: The cash ratio focuses specifically on the company's ability to cover its current liabilities with its cash and cash equivalents. ADEIA CORP's cash ratio has varied somewhat, with values ranging from 0.71 to 1.39. While the company's cash ratio has been above 1 for most quarters, indicating that it has sufficient cash on hand to cover its short-term obligations, there have been fluctuations that may warrant further investigation.
Overall, ADEIA CORP appears to have maintained healthy liquidity levels, as indicated by its current, quick, and cash ratios. The company's ability to cover its short-term liabilities with its current assets, excluding inventory, and with its cash and cash equivalents, suggests that it has a strong financial position in terms of liquidity management.
Additional liquidity measure
| 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 | 102.84 | 114.88 | 92.41 | 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 fluctuated over the past few quarters, indicating variations in the efficiency of its working capital management.
In the most recent quarter, the cash conversion cycle was 102.84 days, showing an improvement from the previous quarter's 114.88 days. This suggests that the company was able to convert its investments in inventory and receivables into cash more efficiently in the last quarter.
Looking further back, the cash conversion cycle was relatively high in some quarters, such as 193.14 days in Sep 30, 2022, and 158.36 days in Jun 30, 2022. These high numbers indicate potential inefficiencies in managing working capital during those periods.
Overall, ADEIA CORP should aim to consistently decrease its cash conversion cycle to improve its liquidity and operational efficiency. By reducing the time it takes to convert inventory and receivables into cash, the company can free up working capital for other investments or operational needs.