Alpha and Omega Semiconductor Ltd (AOSL)

The liquidity ratios of Alpha and Omega Semiconductor Ltd over the specified periods demonstrate a general trend of improvement and stability in the company's ability to meet its short-term obligations.

The current ratio, which measures the company's capacity to cover its current liabilities with its current assets, has shown a consistent upward trend. It increased from 1.75 on June 30, 2021, to 2.06 in 2022, further rising to 2.46 in 2023, and reaching 2.58 in both 2024 and 2025. This indicates an enhancement in the company's short-term liquidity position, suggesting that the firm has more than doubled its current assets relative to current liabilities over the period, thereby reducing liquidity risk.

The quick ratio, which refines the current ratio by excluding inventory and other less liquid assets, experienced fluctuations. It increased from 1.02 in 2021 to 1.43 in 2022, indicating improved immediate liquidity. However, in 2023, it declined to 1.26 and subsequently stabilized around 1.24 in 2024, before slightly decreasing to 1.23 in 2025. Despite some variation, the quick ratio remains above 1, signifying that the company generally maintains sufficient liquid assets to cover its current liabilities without relying heavily on inventory sales.

The cash ratio, representing the most stringent measure of liquidity by considering only cash and cash equivalents, rose from 0.87 in 2021 to 1.18 in 2022. It slightly declined to 1.13 in 2023 and stabilized around that level in 2024, with a further decrease to 1.00 in 2025. These figures suggest that the company’s cash holdings have remained adequate to meet immediate liabilities, although the slight decrease in 2025 may warrant ongoing monitoring.

Overall, the increasing trend in the current and cash ratios indicates a strengthening liquidity position over the period, emphasizing increased capacity to meet short-term obligations. The somewhat steady quick ratio reflects prudent management of liquid assets relative to current liabilities, balancing liquidity with operational efficiency.

---

Additional liquidity measure

The analysis of Alpha and Omega Semiconductor Ltd's cash conversion cycle (CCC) over the specified periods reveals a notable trend of increasing duration. As of June 30, 2021, the CCC stood at approximately 79.27 days. This metric experienced a modest increase in the subsequent year, reaching around 81.50 days as of June 30, 2022. The upward trend accelerated significantly by June 30, 2023, when the CCC increased to approximately 110.16 days, indicating that the company was taking longer to convert its investments in inventory and receivables into cash.

The trend continued into June 30, 2024, with the CCC rising further to approximately 122.16 days, highlighting a substantial elongation of the cash conversion cycle. This extended duration suggests potential challenges in managing inventory turnover, receivables collection, or both, which may impact the company's liquidity and operational efficiency.

Interestingly, by June 30, 2025, the data presents an anomaly with a CCC of approximately 0.11 days. This drastic reduction to near zero days suggests either a data inconsistency, a major shift in operating practices (such as immediate cash sales or significant change in credit policies), or some form of reporting anomaly, since such a drastic decrease is atypical in standard operational contexts.

Overall, the incremental increases from 2021 through 2024 indicate that the company has faced progressively longer periods to complete its cash conversion cycle, which could reflect extended inventory days, receivables days, or a combination of both. The abrupt decrease in 2025 warrants further investigation to understand the underlying reasons, as it deviates sharply from the prior trend and typical industry norms.