Applied Materials Inc (AMAT)
Liquidity ratios
| Oct 31, 2024 | Oct 27, 2024 | Oct 31, 2023 | Oct 29, 2023 | Oct 31, 2022 | |
|---|---|---|---|---|---|
| Current ratio | 2.51 | 2.51 | 2.60 | 2.60 | 2.16 |
| Quick ratio | 1.12 | 1.75 | 0.93 | 1.69 | 0.35 |
| Cash ratio | 1.12 | 1.12 | 0.93 | 0.93 | 0.35 |
Applied Materials Inc's liquidity ratios indicate a healthy liquidity position over the past few years. The current ratio has shown a slight increase from 2.16 in October 2022 to 2.51 in October 2024, suggesting that the company has ample current assets to cover its current liabilities.
The quick ratio, which measures the ability to meet short-term obligations without relying on the sale of inventory, has fluctuated but generally improved from 0.35 in October 2022 to 1.12 in October 2024. This indicates that the company has become more efficient in meeting its short-term obligations using its most liquid assets.
The cash ratio, representing the most conservative measure of liquidity, has also shown improvement from 0.35 in October 2022 to 1.12 in October 2024. This signifies that Applied Materials Inc has a sufficient amount of cash and cash equivalents to cover its current liabilities without relying on other current assets.
Overall, the liquidity ratios of Applied Materials Inc suggest that the company is in a strong financial position to meet its short-term obligations and operational needs, with a good balance of current assets to current liabilities and a growing ability to meet immediate obligations using its liquid assets.
See also:
Additional liquidity measure
| Oct 31, 2024 | Oct 27, 2024 | Oct 31, 2023 | Oct 29, 2023 | Oct 31, 2022 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 138.57 | 157.26 | 147.85 | 172.72 | 156.99 |
Based on the provided data for Applied Materials Inc, we observe fluctuations in the cash conversion cycle over the years. The cash conversion cycle is a metric that reflects the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In October 2022, Applied Materials Inc had a cash conversion cycle of 156.99 days, indicating that it took around 157 days for the company to convert its investments into cash. This figure increased to 172.72 days by October 2023, suggesting a potential delay in the company's cash conversion process.
However, there was a notable improvement by October 31, 2023, when the cash conversion cycle decreased to 147.85 days, indicating that Applied Materials Inc was able to streamline its operations to convert investments into cash more efficiently.
In the following years, we see fluctuating trends in the cash conversion cycle with values of 157.26 days in October 2024 and a decrease to 138.57 days by the end of October 2024. These fluctuations could indicate varying levels of efficiency in managing the company's working capital, inventory turnover, and accounts receivable collection.
Overall, analyzing the cash conversion cycle for Applied Materials Inc can provide insights into the company's operational efficiency, liquidity management, and effectiveness in converting investments into cash flows. It is crucial for the company to continuously monitor and optimize its cash conversion cycle to enhance financial performance and strengthen its competitive position in the industry.