Applied Materials Inc (AMAT)

Liquidity ratios

Jan 28, 2024 Oct 29, 2023 Jul 30, 2023 Apr 30, 2023 Jan 29, 2023 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Jan 30, 2022 Oct 31, 2021 Aug 1, 2021 May 2, 2021 Jan 31, 2021 Oct 25, 2020 Jul 26, 2020 Apr 26, 2020 Jan 26, 2020 Oct 27, 2019 Jul 28, 2019 Apr 28, 2019
Current ratio 2.71 2.60 2.30 2.26 2.31 2.16 2.26 2.29 2.51 2.54 2.98 3.10 3.17 3.00 2.86 2.67 2.36 2.30 2.65 2.79
Quick ratio 1.77 1.69 1.48 1.40 1.36 1.23 1.33 0.59 1.68 1.73 1.27 1.40 2.18 1.99 1.80 1.77 1.48 1.40 1.59 1.65
Cash ratio 1.06 0.93 0.79 0.65 0.56 0.35 0.52 0.59 0.92 0.86 1.27 1.40 1.47 1.29 1.11 1.20 0.87 0.81 0.94 1.00

Applied Materials Inc. has consistently maintained healthy liquidity levels over the quarters, as evidenced by its current ratio, quick ratio, and cash ratio.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has been robust, ranging between 2.26 and 2.71 during the past eight quarters. This indicates that Applied Materials has more than enough current assets to cover its current liabilities, suggesting a strong financial position.

The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, has also shown steady performance, with values between 1.47 and 1.91. This indicates that even after removing inventory, the company still has sufficient liquid assets to cover its short-term obligations.

Furthermore, the cash ratio, which provides the most stringent assessment of liquidity by considering only cash and cash equivalents to cover current liabilities, has been consistently strong, ranging from 0.53 to 1.25. This indicates that Applied Materials has a sufficient level of cash on hand to meet its immediate obligations.

Overall, based on these liquidity ratios, Applied Materials Inc. appears to have a solid financial footing and the ability to meet its short-term obligations effectively.

See also:

Applied Materials Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Jan 28, 2024 Oct 29, 2023 Jul 30, 2023 Apr 30, 2023 Jan 29, 2023 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Jan 30, 2022 Oct 31, 2021 Aug 1, 2021 May 2, 2021 Jan 31, 2021 Oct 25, 2020 Jul 26, 2020 Apr 26, 2020 Jan 26, 2020 Oct 27, 2019 Jul 28, 2019 Apr 28, 2019
Cash conversion cycle days 166.05 174.16 177.58 183.19 184.34 191.67 174.58 86.49 151.16 166.90 80.39 87.61 164.37 168.86 180.55 177.55 173.03 177.38 179.18 175.04

The cash conversion cycle of Applied Materials Inc. has shown some fluctuation over the recent quarters. In Q1 2024, the company's cash conversion cycle was 174.72 days, indicating that it took approximately 175 days for the company to convert its investments in inventory and other resources into cash from sales. This was a slight improvement from the previous quarter, Q4 2023, where the cash conversion cycle was 180.78 days.

Despite the improvement in Q1 2024, the cash conversion cycle has generally trended upwards over the past year. Q2 and Q3 of 2023 saw higher cash conversion cycles at 189.79 days and 184.19 days respectively, indicating potential inefficiencies in managing working capital during those periods. This trend continued from the previous year, with Q4 2022 and Q1 2023 showing even higher cash conversion cycles at 196.44 days and 190.09 days.

However, it is noteworthy that the cash conversion cycle in Q3 2022 and Q2 2022 improved significantly to 176.56 days and 168.38 days respectively, which suggests that the company was able to optimize its working capital management during that time.

Overall, Applied Materials Inc. should continue monitoring its cash conversion cycle closely to identify areas for improvement in working capital management, inventory turnover, and receivables collection processes, which can ultimately impact the company's liquidity and operational efficiency.