Analog Devices Inc (ADI)

Quick ratio

		Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019
Cash	US$ in thousands	958,061	1,470,570	1,977,960	1,055,860	648,322
Short-term investments	US$ in thousands	315,980	454,545	—	86,729	—
Receivables	US$ in thousands	1,469,730	1,800,460	1,459,060	737,536	635,136
Total current liabilities	US$ in thousands	3,200,970	2,442,660	2,770,310	1,364,990	1,508,630
Quick ratio		0.86	1.53	1.24	1.38	0.85

October 28, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($958,061K + $315,980K + $1,469,730K) ÷ $3,200,970K
= 0.86

The quick ratio, also known as the acid-test ratio, assesses a company's ability to meet its short-term obligations using its most liquid assets. For Analog Devices Inc., the quick ratio has fluctuated over the past five years, indicating changes in its liquidity position.

In the fiscal year ending October 28, 2023, the quick ratio was 0.86, a decline from the previous year's 1.45. This suggests a decrease in the company's ability to cover its short-term liabilities with its quick assets.

The quick ratio was relatively strong in fiscal years 2021 and 2022, at 1.51 and 1.45 respectively, indicating a healthy liquidity position. However, in fiscal year 2020, the ratio dropped to 1.40, possibly signaling a temporary decline in liquidity.

In fiscal year 2019, the quick ratio was 0.91, reflecting a relatively weaker liquidity position compared to the subsequent years.

Overall, the fluctuation in Analog Devices Inc.'s quick ratio over the past five years highlights variations in its ability to cover short-term liabilities with its liquid assets, and it would be important to assess the underlying factors influencing these changes in liquidity.