Advanced Micro Devices Inc (AMD)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.62 | 2.51 | 2.36 | 2.02 | 2.54 |
| Quick ratio | 1.64 | 1.83 | 1.74 | 1.57 | 1.85 |
| Cash ratio | 0.70 | 0.86 | 0.92 | 0.85 | 0.95 |
Advanced Micro Devices Inc's liquidity ratios demonstrate a generally healthy liquidity position over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has fluctuated between 2.02 and 2.62 during this period. This indicates that the company has a sufficient level of current assets to meet its current liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown variation but generally stayed above 1.0. This implies that Advanced Micro Devices Inc can cover its short-term liabilities without relying heavily on inventory, which is a positive sign of liquidity.
The cash ratio, which is the most conservative measure of liquidity as it focuses solely on cash and cash equivalents, has ranged from 0.70 to 0.95. While the cash ratio has been lower compared to the other liquidity ratios, it still suggests that the company maintains a reasonable level of cash to meet its immediate obligations without relying on other current assets.
Overall, the liquidity ratios suggest that Advanced Micro Devices Inc has maintained a solid liquidity position over the years, with the ability to meet its short-term obligations comfortably while keeping a balance between different types of current assets.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 167.20 | 149.83 | 104.57 | 89.88 | 133.05 |
The cash conversion cycle of Advanced Micro Devices Inc has fluctuated over the years based on the provided data.
As of December 31, 2020, the cash conversion cycle stood at 133.05 days, indicating that it took the company approximately 133 days to convert its investments in inventory and other resources into cash inflows from sales.
By December 31, 2021, the cash conversion cycle decreased to 89.88 days, suggesting an improvement in the company's efficiency in managing its working capital.
However, by December 31, 2022, the cash conversion cycle increased to 104.57 days, showing a slight deterioration in the efficiency of AMD's cash conversion process.
The trend continued into December 31, 2023, with the cash conversion cycle further increasing to 149.83 days, indicating that AMD took longer to convert its investments into liquid cash.
By December 31, 2024, the cash conversion cycle reached 167.20 days, which suggests a significant increase in the time taken by AMD to convert investments into cash, potentially indicating inefficiencies in working capital management or challenges in the company's operations.
Overall, fluctuations in the cash conversion cycle can provide insights into AMD's ability to manage its working capital efficiently and generate cash from its operating activities. Tracking this metric over time can help assess changes in the company's operational efficiency and financial health.