Axon Enterprise Inc. (AXON)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.30 | 3.00 | 3.00 | 2.65 | 3.83 |
| Quick ratio | 0.65 | 1.65 | 1.62 | 1.06 | 2.19 |
| Cash ratio | 0.65 | 1.65 | 1.62 | 1.06 | 2.19 |
Axon Enterprise Inc.'s liquidity ratios have shown variations over the years. The current ratio decreased from 3.83 in 2020 to 2.30 in 2024, indicating a potential decline in the company's ability to cover its short-term obligations with its current assets. Similarly, the quick ratio followed a downward trend from 2.19 in 2020 to 0.65 in 2024, suggesting a decreasing ability to meet immediate financial obligations without relying on inventory.
The cash ratio, a more stringent measure of liquidity, also decreased from 2.19 in 2020 to 0.65 in 2024, signaling a reduction in the company's ability to pay off its current liabilities solely with cash and cash equivalents. Overall, the declining trend in these liquidity ratios may raise concerns about Axon Enterprise Inc.'s short-term financial health and ability to meet its obligations promptly.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 115.13 | 162.00 | 160.20 | 123.02 | 124.06 |
The cash conversion cycle for Axon Enterprise Inc. has shown some fluctuations over the years. In 2020, the company's cash conversion cycle was 124.06 days, slightly improving to 123.02 days by the end of 2021. However, in 2022 and 2023, the cash conversion cycle increased significantly to 160.20 days and 162.00 days, respectively.
This prolonged conversion cycle indicates that Axon Enterprise Inc. took longer to convert its investments in inventory and other resources into cash during these years. It may suggest inefficiencies in managing working capital, potentially leading to higher holding costs and a strain on cash flow.
On a positive note, by the end of 2024, there was a notable improvement in the cash conversion cycle to 115.13 days. This suggests that the company may have implemented strategies to streamline operations, improve inventory turnover, or manage receivables more effectively.
Overall, monitoring and managing the cash conversion cycle is crucial for Axon Enterprise Inc. to optimize its cash flow, enhance liquidity, and ensure efficient working capital management for sustainable business operations.