Advanced Energy Industries Inc (AEIS)

Based on the provided data, the liquidity ratios of Advanced Energy Industries Inc have shown fluctuations over the years.

The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has generally been above 3 in recent years, indicating a healthy liquidity position. However, there has been a slight downward trend from 3.30 in 2020 to 4.42 in 2024. This suggests that the company may be becoming less able to meet its short-term obligations with its current assets.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Advanced Energy Industries Inc's quick ratio has also experienced a downward trend, falling from 1.62 in 2020 to 2.30 in 2024. Despite the decline, the quick ratio has generally remained above 1, indicating that the company has an acceptable level of liquidity to cover immediate liabilities without relying on inventory sales.

Lastly, the cash ratio, which is the most conservative liquidity measure as it only includes cash and cash equivalents, mirrors the trend seen in the quick ratio. The cash ratio has decreased from 1.62 in 2020 to 2.30 in 2024, suggesting that the company has been able to maintain a strong cash position relative to its current liabilities.

Overall, while there have been some fluctuations in the liquidity ratios of Advanced Energy Industries Inc, the company has maintained a solid liquidity position throughout the years, with current, quick, and cash ratios all indicating a healthy ability to meet short-term obligations.

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Additional liquidity measure

Advanced Energy Industries Inc's cash conversion cycle has shown some fluctuations over the years. In December 2020, the cash conversion cycle was at 92.44 days, indicating that it took the company approximately 92 days to convert its investments in inventory and accounts receivable into cash. By December 2021, the cycle increased to 133.73 days, reflecting a lengthening of the time required for the company to convert its resources into cash.

In the following years, the cash conversion cycle fluctuated, reaching 117.31 days in December 2022, and then dropping to 115.37 days by December 2023. However, by December 2024, the cycle increased significantly to 138.08 days, signaling a potential delay in the company's ability to convert its resources into cash efficiently.

Overall, the trend in Advanced Energy Industries Inc's cash conversion cycle suggests variability in the company's liquidity and efficiency in managing its working capital. It is essential for the company to closely monitor and address factors contributing to these fluctuations to maintain a healthy cash conversion cycle and optimize its cash flow operations.