Advanced Energy Industries Inc (AEIS)
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 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 4.42 | 4.62 | 5.47 | 5.61 | 5.10 | 5.32 | 3.80 | 3.15 | 3.02 | 2.73 | 2.80 | 3.23 | 3.14 | 3.01 | 2.93 | 3.18 | 3.30 | 2.91 | 2.71 | 2.84 |
| Quick ratio | 2.30 | 2.26 | 3.21 | 3.42 | 3.11 | 3.13 | 1.50 | 1.20 | 1.17 | 0.95 | 0.96 | 1.44 | 1.48 | 1.42 | 1.35 | 1.57 | 1.62 | 1.28 | 1.12 | 1.17 |
| Cash ratio | 2.30 | 2.26 | 3.21 | 3.42 | 3.11 | 3.13 | 1.50 | 1.20 | 1.17 | 0.95 | 0.96 | 1.44 | 1.48 | 1.42 | 1.35 | 1.57 | 1.62 | 1.28 | 1.12 | 1.17 |
Liquidity Ratio Analysis of Advanced Energy Industries Inc
1. Current Ratio:
- The current ratio of Advanced Energy Industries Inc has shown a generally increasing trend from March 31, 2020, to December 31, 2024, with some fluctuations in between.
- The current ratio increased steadily from 2.84 on March 31, 2020, to a peak of 5.61 on March 31, 2024, indicating the company's ability to meet short-term obligations improved significantly over this period.
- However, there was a slight decrease in the current ratio in the most recent two quarters ending September 30, 2024, and December 31, 2024, although it remained above 4.
2. Quick Ratio:
- The quick ratio of Advanced Energy Industries Inc also displayed an increasing trend, indicative of the company's ability to cover its immediate liabilities with its most liquid assets.
- The quick ratio rose from 1.17 on March 31, 2020, to 3.42 on March 31, 2024. This shows a substantial improvement in the company's short-term liquidity position.
- Similar to the current ratio, a slight decline in the quick ratio was seen in the last two quarters of 2024, but it remained above 2.
3. Cash Ratio:
- The cash ratio, which is a more stringent measure of liquidity, exhibited a pattern similar to the current and quick ratios, increasing over the years.
- Advanced Energy Industries Inc improved its cash ratio from 1.17 on March 31, 2020, to 3.42 on March 31, 2024. This indicates the company held a higher proportion of cash to meet its short-term obligations.
- Like the other ratios, there was a small decline in the cash ratio in the last two quarters of 2024, although it remained above 2.
In conclusion, the liquidity ratios of Advanced Energy Industries Inc, including the current, quick, and cash ratios, demonstrate a generally positive trend over the analyzed period. The company has shown an improved ability to meet its short-term obligations and cover immediate liabilities with more liquid assets, indicating a strong liquidity position overall.
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 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 136.32 | 140.36 | 139.18 | 128.13 | 113.71 | 119.27 | 121.74 | 123.50 | 117.31 | 134.13 | 142.33 | 136.80 | 133.73 | 139.76 | 120.14 | 102.12 | 92.44 | 107.42 | 128.20 | 142.78 |
The cash conversion cycle (CCC) of Advanced Energy Industries Inc has fluctuated over the assessed periods. The CCC is a metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter CCC indicates efficient management of working capital.
Based on the provided data:
- The CCC was 142.78 days as of March 31, 2020, indicating a lengthy cycle of converting investments into cash.
- The cycle improved to 92.44 days by the end of December 31, 2020, suggesting a more efficient management of working capital.
- However, the cycle increased to 142.33 days by June 30, 2022, reflecting a potential delay in converting investments to cash.
- As of December 31, 2024, the CCC stood at 136.32 days, which is higher compared to the earlier stages of improvement observed in 2020.
Overall, the fluctuations in Advanced Energy Industries Inc's CCC suggest changes in the company's ability to manage its working capital efficiently. Further analysis would be needed to determine the specific reasons behind these fluctuations and to assess the impact on the company's financial performance and liquidity.