Amkor Technology Inc (AMKR)

AMKOR Technology Inc.'s liquidity ratios have shown positive trends over the past five years, indicating an improvement in the company's ability to meet its short-term obligations.

The current ratio has steadily increased from 1.89 in 2019 to 2.31 in 2023, portraying a healthy liquidity position. This ratio suggests that the company has $2.31 in current assets for every $1 of current liabilities, reflecting its ability to cover short-term obligations comfortably.

Similarly, the quick ratio has also demonstrated a favorable trend, rising from 1.68 in 2019 to 2.02 in 2023. This ratio measures the company's ability to meet its short-term liabilities using its most liquid assets, excluding inventory. The increasing trend indicates a stronger liquidity position and implies that AMKOR can cover its immediate obligations more effectively.

The cash ratio, which provides an even more stringent measure of liquidity by focusing solely on cash and cash equivalents, has also improved significantly. The ratio has risen from 0.88 in 2019 to 1.19 in 2023. This suggests that the company's cash reserves are increasing relative to its short-term liabilities, enhancing its ability to meet obligations without relying on non-cash assets.

Overall, AMKOR Technology Inc.'s liquidity ratios paint a positive picture of the company's financial health, with improvements in current, quick, and cash ratios over the past five years. This enhanced liquidity position can provide the company with the flexibility to navigate unforeseen challenges and capitalize on new opportunities.

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Additional liquidity measure

AMKOR Technology Inc.'s cash conversion cycle has fluctuated over the past five years. In 2023, the company's cash conversion cycle improved to 40.80 days, indicating that it took the company approximately 40.80 days to convert its investments in inventory and accounts receivable into cash. This represents a more efficient use of the company's working capital compared to the previous year.

In 2022, the cash conversion cycle was 53.20 days, reflecting a longer time period for the company to convert its investments into cash compared to 2021 when the cycle was 49.31 days. The increase in 2022 suggests potential issues with managing inventory, collecting receivables, or efficiently managing cash flows.

The cash conversion cycle in 2020 and 2019 was relatively stable at around 39-40 days, indicating consistent performance in converting assets into cash during those years. Overall, a lower cash conversion cycle is generally favorable as it indicates that the company is able to efficiently manage its working capital and generate cash flow from its operations. AMKOR Technology Inc. should continue to monitor and manage its cash conversion cycle to optimize its working capital efficiency.