Arlo Technologies (ARLO)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.49 1.42 1.48 1.50 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
Quick ratio 0.86 0.74 0.81 0.84 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
Cash ratio 0.86 0.74 0.81 0.84 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

Arlo Technologies has shown relatively stable current ratios over the years, ranging between 1.38 to 1.79. This indicates the company's ability to cover its short-term obligations with its current assets. The current ratio has been above 1, suggesting a healthy liquidity position, but it has been gradually decreasing, which may warrant attention to ensure ongoing liquidity.

On the other hand, the quick ratio, which excludes inventory from current assets, has shown a declining trend from 1.08 to 0.74. This indicates that Arlo Technologies may face challenges in meeting its short-term liabilities using only its most liquid assets. The decrease in the quick ratio indicates a potential weakening liquidity position over time.

The cash ratio, similar to the quick ratio, has also shown a declining trend, indicating that Arlo Technologies may have limited ability to cover its current liabilities with cash alone. A cash ratio below 1 suggests that the company may need to rely on its other current assets to meet short-term obligations.

Overall, the liquidity ratios paint a picture of a company with a decreasing ability to meet its short-term obligations with its most liquid assets. Arlo Technologies may need to closely monitor its liquidity position and consider strategies to improve it, such as managing its working capital efficiently or exploring financing options.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 45.86 56.73 49.72 50.23 43.32 60.56 44.02 42.99 47.95 70.54 38.23 37.39 42.84 47.40 51.10 68.78 78.26 78.70 73.47 65.56

The cash conversion cycle of Arlo Technologies has shown fluctuations over the periods analyzed. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Arlo Technologies' cash conversion cycle was at 65.56 days as of March 31, 2020, and increased to 78.70 days by September 30, 2020. This longer cash conversion cycle may indicate inefficiencies in managing inventory or delays in collecting receivables.

However, from September 2021 to March 2024, Arlo Technologies was able to improve its cash conversion cycle significantly, reducing it to as low as 37.39 days by March 31, 2022. A lower cash conversion cycle generally suggests a more efficient utilization of resources and faster cash generation from sales.

There was a slight increase in the cash conversion cycle by September 30, 2024, reaching 56.73 days. While this increase may be a cause for concern, it is important to analyze the company's operations and the reasons behind this change to determine if it poses a risk to the company's financial health.

Overall, monitoring the cash conversion cycle is crucial as it provides insights into the efficiency of Arlo Technologies' working capital management and can help identify areas for improvement in managing its cash flows effectively.