Broadcom Inc (AVGO)
Liquidity ratios
| 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 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 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 | 1.44 | 1.32 | 1.26 |
| Quick ratio | 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 | 0.73 | 0.66 | 0.63 |
| Cash ratio | 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 | 0.73 | 0.66 | 0.63 |
Broadcom Inc's liquidity ratios show fluctuations over time. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has generally been above 2 in recent periods, indicating a healthy liquidity position. However, there was a slight decline in the current ratio from 2.82 in October 2023 to 1.33 in February 2024, which might raise concerns about the company's short-term financial health.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also displayed some volatility. While it generally exceeds 1 in most periods, indicating a strong ability to meet short-term obligations without relying on inventory, it dipped below 1 in a few instances. Notably, the quick ratio fell significantly from 2.34 in October 2023 to 0.83 in February 2024, suggesting potential difficulties in meeting immediate payment obligations without inventory.
The cash ratio, which provides the most conservative view of liquidity by considering only cash and cash equivalents, has generally been moderate to high, reflecting Broadcom Inc's ability to cover short-term liabilities with cash on hand. Despite some fluctuations, the cash ratio remained above 1 in recent periods, indicating a strong cash position.
Overall, while Broadcom Inc has shown a generally strong liquidity position with current and quick ratios above 1, the significant declines in these ratios in the most recent period raise some concerns about the company's ability to meet short-term obligations. It may be advisable for investors and stakeholders to closely monitor Broadcom Inc's liquidity position in future periods to ensure financial stability.
See also:
Broadcom Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 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 | 0.69 | 3.47 | 10.08 |
The cash conversion cycle of Broadcom Inc fluctuated over the analyzed periods, indicating variations in the company's liquidity management and operational efficiency. The cash conversion cycle, which represents the time taken to convert inventory into cash, shows how well the company manages its working capital components.
Broadcom Inc's cash conversion cycle ranged from a negative -9.86 days to a peak of 69.00 days, indicating periods of efficient cash management and prolonged liquidity cycles. The negative values suggest that the company was able to generate cash from its operating cycle faster than paying its obligations, which can be seen as a positive sign of efficient operations.
A shorter cash conversion cycle typically signifies better liquidity and efficiency in managing inventory, accounts receivable, and accounts payable. Conversely, a longer cycle can indicate potential issues such as slow inventory turnover, extended collection periods, or delayed payables.
Overall, analyzing Broadcom Inc's cash conversion cycle provides insights into the company's working capital management and operational effectiveness across different reporting periods. It is essential for investors and analysts to closely monitor these trends to assess the company's financial health and performance.