Analog Devices Inc (ADI)

Cash ratio

		Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	May 1, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019
Cash and cash equivalents	US$ in thousands	1,303,560	958,061	1,149,250	1,177,610	1,670,460	1,470,570	1,524,960	1,737,730	1,790,400	1,977,960	1,480,700	1,305,220	1,048,060	1,055,860	1,090,260	784,937	654,408	648,322	612,164	713,601
Short-term investments	US$ in thousands	—	315,980	—	—	—	454,545	—	—	—	—	105,562	94,033	91,720	86,729	82,953	—	—	-47,154	—	—
Total current liabilities	US$ in thousands	2,923,370	3,200,970	2,831,020	2,646,410	2,433,680	2,442,660	2,441,200	2,326,210	2,221,910	2,770,310	2,793,340	2,776,830	1,676,760	1,364,990	1,687,780	1,582,000	1,770,540	1,508,630	1,483,680	1,365,040
Cash ratio		0.45	0.40	0.41	0.44	0.69	0.79	0.62	0.75	0.81	0.71	0.57	0.50	0.68	0.84	0.70	0.50	0.37	0.40	0.41	0.52

February 3, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,303,560K + $—K) ÷ $2,923,370K
= 0.45

Analog Devices Inc.'s cash ratio has shown fluctuations over the past eight quarters. The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio is generally considered favorable as it indicates a stronger ability to meet short-term obligations.

Looking at the data provided, we can see that the cash ratio ranged from a low of 0.40 in Q4 2023 to a high of 0.84 in both Q2 2022 and Q4 2022. The trend in the cash ratio seems to be somewhat inconsistent, with no clear pattern of improvement or deterioration over the quarters.

Notably, the cash ratio dropped significantly in Q4 2023 compared to the previous quarter, indicating a decrease in the company's liquidity position. However, this was followed by an increase in the cash ratio in Q1 2024, which may suggest an improvement in the availability of cash to cover short-term obligations.

It is important for stakeholders to closely monitor Analog Devices Inc.'s cash ratio to assess its liquidity risk and ability to meet financial obligations in the short term. Overall, the company's cash ratio appears to have varied over the quarters, highlighting the importance of robust cash management practices to ensure sufficient liquidity.