Arlo Technologies (ARLO)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.55 | 1.40 | 1.39 | 1.46 | 1.43 | 1.38 | 1.49 | 1.53 | 1.44 | 1.48 | 1.52 | 1.63 | 1.50 | 1.56 | 1.64 | 1.79 | 1.60 | 1.74 | 2.04 | 1.96 |
| Quick ratio | 1.25 | 1.05 | 1.08 | 0.79 | 1.11 | 0.59 | 0.78 | 0.82 | 1.21 | 0.85 | 1.22 | 1.27 | 1.20 | 1.18 | 1.26 | 1.41 | 1.31 | 1.29 | 1.36 | 1.25 |
| Cash ratio | 0.85 | 0.68 | 0.74 | 0.79 | 0.70 | 0.59 | 0.78 | 0.82 | 0.83 | 0.85 | 0.95 | 0.99 | 0.87 | 0.91 | 1.03 | 1.08 | 0.87 | 0.78 | 0.86 | 0.90 |
Arlo Technologies Inc's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet short-term financial obligations.
The current ratio, which reflects the company's ability to pay off its current liabilities with its current assets, has shown a slightly fluctuating trend over the past eight quarters. In Q4 2023, the current ratio stood at 1.55, indicating that the company had $1.55 in current assets for every $1 in current liabilities. This ratio has generally been above 1, suggesting that Arlo has sufficient current assets to cover its short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited fluctuations but generally followed a similar pattern to the current ratio. In Q4 2023, the quick ratio was 1.31, indicating a slightly lower level of liquidity compared to the current ratio. By excluding inventory, this ratio provides a more conservative estimate of the company's ability to meet short-term obligations.
The cash ratio, the most conservative liquidity measure that only considers cash and cash equivalents, showed a similar trend of variability but with a lower level compared to the current and quick ratios. In Q4 2023, the cash ratio was 0.91, indicating that the company had $0.91 in cash and equivalents for every $1 in current liabilities. This ratio reflects the company's ability to cover its short-term obligations with its most liquid assets.
Overall, Arlo Technologies Inc's liquidity ratios suggest that the company has maintained a level of financial health in terms of its ability to meet short-term obligations, with the current and quick ratios generally above 1 and the cash ratio consistently above 0.7 over the past eight quarters. Investors and creditors may find these ratios reassuring, indicating the company's ability to meet its financial obligations in the near term.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 33.35 | 28.59 | 25.61 | -5.06 | 44.58 | -25.12 | -29.20 | -24.13 | 28.27 | -19.30 | 46.85 | 76.83 | 81.41 | 51.45 | 57.67 | 76.72 | 89.37 | 130.99 | 223.32 | 230.23 |
The cash conversion cycle of Arlo Technologies Inc has fluctuated over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 29.63 days, indicating the average number of days it takes for the company to convert its investments in inventory and other resources into cash from sales. This represents an increase from the previous quarter, where the cycle was 21.26 days.
The trend in Q4 2023 suggests that Arlo Technologies Inc took slightly longer to convert its resources into cash compared to Q3 2023. However, when comparing Q4 2023 to the same quarter in the previous year (Q4 2022), there has been a decrease in the cash conversion cycle, which is a positive sign.
Overall, the company's cash conversion cycle has shown some variations over the quarters, with fluctuations between shorter and longer cycles. It is essential for Arlo Technologies Inc to manage its working capital efficiently to ensure a faster conversion of investments into cash, ultimately improving its liquidity and financial health.