Broadcom Inc (AVGO)
Cash ratio
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 9,348,000 | 14,189,000 | 12,416,000 | 12,163,000 | 7,618,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 16,697,000 | 7,405,000 | 7,052,000 | 6,281,000 | 6,371,000 |
| Cash ratio | 0.56 | 1.92 | 1.76 | 1.94 | 1.20 |
November 3, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($9,348,000K
+ $—K)
÷ $16,697,000K
= 0.56
The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations.
Broadcom Inc's cash ratio has shown a declining trend over the past five years, with a sharp decrease from 1.94 in 2021 to 0.56 in 2024. This suggests a decrease in the company's ability to cover its short-term liabilities solely with its cash and cash equivalents.
A cash ratio of 0.56 in 2024 indicates that Broadcom had $0.56 in cash and cash equivalents for every $1 of current liabilities. This could potentially raise concerns about the company's liquidity position and ability to handle short-term financial obligations without relying on other sources of funding.
It is worth further investigation to understand the reasons behind the decline in Broadcom's cash ratio and to assess the overall liquidity position of the company. Additionally, comparing the cash ratio to industry benchmarks and peers could provide further insights into Broadcom's liquidity performance relative to its industry.
Peer comparison
Nov 3, 2024