Applied Materials Inc (AMAT)
Liquidity ratios
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.68 | 2.51 | 2.51 | 2.86 | 2.86 | 2.80 | 2.80 | 2.71 | 2.71 | 2.60 | 2.60 | 2.30 | 2.30 | 2.26 | 2.31 | 2.31 | 2.16 | 2.16 | 2.26 | 2.29 |
| Quick ratio | 1.06 | 1.12 | 1.75 | 1.26 | 1.95 | 1.10 | 1.82 | 1.06 | 1.77 | 0.93 | 1.69 | 0.79 | 1.48 | 0.65 | 0.56 | 1.36 | 0.35 | 1.23 | 0.52 | 0.59 |
| Cash ratio | 1.06 | 1.12 | 1.12 | 1.26 | 1.26 | 1.10 | 1.10 | 1.06 | 1.06 | 0.93 | 0.93 | 0.79 | 0.79 | 0.65 | 0.56 | 0.56 | 0.35 | 0.35 | 0.52 | 0.59 |
Applied Materials Inc's liquidity ratios show consistent strength over the analyzed period. The current ratio, which measures the company's ability to meet short-term liabilities with its current assets, has generally remained above 2, indicating a healthy liquidity position. Specifically, the current ratio ranged from 2.16 to 2.86, with the highest value reaching 2.86 as of July 28, 2024. This suggests that Applied Materials Inc has sufficient current assets to cover its current liabilities, providing a cushion for short-term financial obligations.
In terms of the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, Applied Materials Inc also demonstrates stability and capability to meet short-term liabilities. The quick ratio varied from 0.35 to 1.95, with the lowest value reported on October 31, 2022, and the highest on July 28, 2024. This indicates that the company's ability to cover short-term obligations without relying heavily on inventory has improved over time, reflecting a strong liquidity position.
Moreover, the cash ratio, which focuses solely on the most liquid assets like cash and equivalents to cover current liabilities, has consistently been above 1 for Applied Materials Inc. This signifies that the company has a sufficient cash buffer to meet immediate financial obligations without having to rely on selling other current assets. The cash ratio fluctuated between 0.35 and 1.26, with the highest value recorded on July 31, 2024, indicating a strengthening cash position over the analyzed period.
Overall, Applied Materials Inc's liquidity ratios demonstrate a solid financial position with the ability to efficiently meet short-term obligations, ensuring operational stability and financial resilience.
See also:
Additional liquidity measure
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 132.09 | 127.30 | 163.56 | 135.15 | 168.43 | 138.18 | 170.70 | 135.34 | 170.80 | 139.65 | 181.70 | 146.77 | 183.76 | 145.55 | 142.45 | 185.26 | 144.46 | 196.87 | 145.44 | 89.67 |
The cash conversion cycle of Applied Materials Inc has fluctuated over the period from May 1, 2022, to January 31, 2025. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
The cash conversion cycle started at 89.67 days on May 1, 2022, indicating that the company was efficient in managing its working capital. However, there was a significant increase to 196.87 days by October 30, 2022, which may suggest potential issues in managing inventory, accounts receivable, and accounts payable effectively.
Subsequently, the company managed to reduce the cash conversion cycle to 135.15 days by July 31, 2024, which implies improved efficiency in cash management and potentially better control over inventory levels and payment terms with suppliers and customers.
Overall, analyzing the cash conversion cycle helps to assess how effectively Applied Materials Inc is managing its working capital and cash flow operations. It is important for investors and stakeholders to monitor this metric as it can provide insights into the company's operational efficiency and financial health.