Applied Materials Inc (AMAT)
Liquidity ratios
| Oct 27, 2024 | Jul 28, 2024 | Apr 28, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.51 | 2.86 | 2.80 | 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 |
| Quick ratio | 1.75 | 1.95 | 1.82 | 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 |
| Cash ratio | 1.12 | 1.26 | 1.10 | 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 |
Applied Materials Inc has shown consistent improvement in its liquidity ratios over the past few quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with current assets, has stayed above 2.0, indicating a healthy liquidity position. The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also been strong, generally above 1.5.
The cash ratio, which specifically looks at the company's ability to cover its current liabilities with cash and cash equivalents, has also shown improvement, reaching levels above 1.0 in recent quarters. This suggests that Applied Materials has a comfortable level of cash on hand to meet its short-term obligations.
Overall, the trend in Applied Materials Inc's liquidity ratios reflects a solid financial position with sufficient liquidity to support its operations and short-term obligations.
See also:
Additional liquidity measure
| Oct 27, 2024 | Jul 28, 2024 | Apr 28, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 158.46 | 161.19 | 165.91 | 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 |
The cash conversion cycle of Applied Materials Inc has fluctuated over the past few years, ranging from 80.39 days to 191.67 days. The company's cash conversion cycle measures the time it takes for the company to convert its investment in inventory and other inputs into cash flows from sales.
A shorter cash conversion cycle indicates more efficient management of working capital, as the company is able to quickly sell products, collect payments, and pay suppliers. Conversely, a longer cycle suggests inefficiencies in managing inventory, accounts receivable, and accounts payable.
Applied Materials Inc's cash conversion cycle has experienced some variation, with the cycle increasing and decreasing over different periods. The company should aim to reduce its cash conversion cycle by streamlining operations, improving inventory management, accelerating accounts receivable collections, and extending accounts payable payment terms to enhance cash flow efficiency.
Monitoring and managing the cash conversion cycle are crucial for liquidity management and working capital optimization, ensuring the company maintains a healthy financial position and operational efficiency.