Broadcom Inc (AVGO)
Liquidity ratios
| Nov 3, 2024 | Aug 4, 2024 | May 5, 2024 | Feb 4, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.17 | 1.04 | 1.25 | 1.33 | 2.82 | 2.50 | 2.38 | 2.52 | 2.62 | 2.32 | 2.14 | 2.44 | 2.64 | 2.41 | 2.21 | 2.14 | 1.87 | 2.04 | 2.15 | 1.56 |
| Quick ratio | 0.82 | 0.76 | 0.76 | 0.83 | 2.34 | 2.04 | 1.94 | 2.12 | 2.18 | 1.89 | 1.30 | 2.03 | 2.27 | 1.71 | 1.48 | 1.80 | 1.56 | 1.32 | 1.39 | 0.83 |
| Cash ratio | 0.56 | 0.52 | 0.49 | 0.58 | 1.92 | 1.64 | 1.54 | 1.69 | 1.76 | 1.49 | 1.30 | 1.63 | 1.94 | 1.71 | 1.48 | 1.43 | 1.20 | 1.32 | 1.39 | 0.83 |
Broadcom Inc's liquidity ratios indicate its ability to meet short-term obligations with its current assets. The current ratio has fluctuated over the past few quarters but generally remained above 1, indicating that the company has more current assets than current liabilities. However, the current ratio has been trending downwards, indicating a potential weakening liquidity position.
The quick ratio, which excludes inventory from current assets, has also fluctuated but generally remained below 1 in the recent quarters. This suggests that Broadcom may have difficulty meeting its short-term obligations without relying on inventory, which may not be easily convertible to cash.
The cash ratio, which is the most conservative liquidity measure, has also varied but generally remained above 1 in recent quarters. This indicates that Broadcom has a sufficient amount of cash to cover its current liabilities without relying on other current assets.
Overall, while Broadcom's liquidity ratios have been fluctuating, the downward trend in the current ratio and the consistent low quick ratio suggest that the company may need to manage its short-term liquidity position more effectively in the future.
See also:
Broadcom Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Nov 3, 2024 | Aug 4, 2024 | May 5, 2024 | Feb 4, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 33.13 | 39.33 | 56.93 | 58.75 | 54.70 | 57.59 | 65.60 | 65.66 | 62.98 | 69.00 | 20.49 | 47.79 | 34.80 | 6.64 | 6.06 | 39.20 | 40.97 | -0.39 | -9.86 | -1.48 |
The cash conversion cycle provides insights into how efficiently Broadcom Inc manages its cash flows related to its operations. It is calculated by adding the days inventory outstanding (DIO) to the days sales outstanding (DSO) and then subtracting the days payables outstanding (DPO).
Over the past few quarters, Broadcom Inc's cash conversion cycle has displayed significant variation, ranging from negative days to around 70 days. This indicates fluctuations in the company's ability to convert its investments in inventory and accounts receivable into cash.
A shorter cash conversion cycle suggests that Broadcom Inc is efficiently managing its working capital, swiftly turning inventory and accounts receivable into cash. Conversely, a longer cycle may indicate inefficiencies in managing cash flow, potentially tying up cash in inventory or receivables for extended periods.
The trend of the cash conversion cycle for Broadcom Inc shows periods of optimization and challenges in cash flow management. It would be beneficial for the company to closely monitor and strategize to improve this metric by streamlining operations, optimizing inventory levels, and managing accounts receivable effectively to enhance overall liquidity and financial performance.