Advanced Micro Devices Inc (AMD)

Advanced Micro Devices Inc's liquidity ratios have shown a generally positive trend over the past five years. The current ratio, which indicates the company's ability to cover its short-term liabilities with its short-term assets, has been above 2 for the past three years, indicating a healthy liquidity position. However, there was a slight decrease in 2021 compared to previous years, but the ratio rebounded in 2022 and 2023.

The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, also demonstrates an improving trend over the years. It has consistently remained above 1, indicating that the company can cover its short-term obligations without relying on the sale of inventory. This shows a relatively strong ability to meet immediate liabilities using its most liquid assets.

The cash ratio, which provides the most stringent measure of liquidity by considering only cash and cash equivalents to cover current liabilities, has also been relatively stable over the years. While lower than the current and quick ratios, it has generally remained above 0.80, suggesting that Advanced Micro Devices Inc has a reasonable level of cash on hand to meet its short-term obligations.

Overall, the liquidity ratios of Advanced Micro Devices Inc indicate a healthy liquidity position, with the company having adequate short-term assets to cover its short-term liabilities. The upward trend in these ratios over the years reflects an improving liquidity position and suggests a reduced risk of financial distress due to liquidity issues.

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See also:

Advanced Micro Devices Inc Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of Advanced Micro Devices Inc has shown variability over the past five years.

In 2023, the cash conversion cycle increased significantly to 149.83 days, reflecting a longer period required to convert inventory into cash. This may indicate challenges in managing inventory and collecting receivables efficiently.

In 2022, the cash conversion cycle decreased to 104.57 days, suggesting an improvement in the company's ability to manage working capital and generate cash from operations more effectively.

In 2021, the cash conversion cycle was 89.88 days, indicating further improvement in working capital management compared to the previous year.

In 2020, there was a notable increase in the cash conversion cycle to 133.05 days, signaling potential difficulties in converting sales into cash within a reasonable timeframe.

In 2019, the cash conversion cycle was 114.48 days, showing a moderate improvement compared to the following year.

Overall, fluctuations in the cash conversion cycle of Advanced Micro Devices Inc suggest varying efficiencies in managing inventory, accounts receivable, and accounts payable across the years analyzed. Further analysis of the underlying factors driving these changes would be necessary to understand the company's working capital dynamics comprehensively.