Axon Enterprise Inc. (AXON)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 3.00 | 3.00 | 2.65 | 3.83 | 3.12 |
| Quick ratio | 2.08 | 2.16 | 1.69 | 3.16 | 2.65 |
| Cash ratio | 1.55 | 1.55 | 0.89 | 2.19 | 1.79 |
Based on the liquidity ratios of Axon Enterprise Inc over the past five years, we can observe the following trends:
1. Current Ratio:
The current ratio measures the company's ability to meet its short-term obligations with its current assets. Axon Enterprise Inc has maintained a relatively strong current ratio over the past five years, ranging from 2.65 to 3.83. This indicates that the company has a sufficient level of current assets to cover its current liabilities, providing a buffer for potential liquidity challenges.
2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. Axon Enterprise Inc's quick ratio has also been consistently strong, ranging from 2.39 to 3.48. This suggests that the company has a solid ability to meet its short-term obligations using its most liquid assets.
3. Cash Ratio:
The cash ratio is the most stringent liquidity measure, focusing solely on cash and cash equivalents relative to current liabilities. Axon Enterprise Inc's cash ratio has shown a moderate but stable trend over the years, ranging from 1.62 to 2.59. This indicates that the company has a reasonable level of cash on hand to cover its immediate liabilities without relying on other current assets.
Overall, Axon Enterprise Inc's liquidity ratios demonstrate a consistent ability to meet its short-term obligations and maintain a healthy level of liquidity. The company's strong performance in these liquidity metrics suggests effective management of working capital and financial resources to support its operations.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 157.51 | 172.66 | 175.59 | 174.90 | 125.78 |
The cash conversion cycle of Axon Enterprise Inc has shown some fluctuation over the past five years. In 2019, the cash conversion cycle was relatively shorter at 122.16 days, indicating that the company was able to convert its investments in inventory and receivables into cash relatively quickly. However, in subsequent years, the cash conversion cycle increased, reaching its peak at 222.67 days in 2022 before slightly improving to 206.49 days in 2023.
A longer cash conversion cycle suggests that Axon Enterprise Inc takes more time to convert its investments in inventory and receivables into cash, which can potentially tie up more funds in working capital. This could result in increased liquidity and operational risks for the company.
Overall, Axon Enterprise Inc should closely monitor and manage its cash conversion cycle to ensure efficient working capital management and maximize cash flows. Identifying areas for improvement in inventory turnover and accounts receivables collection could help in shortening the cash conversion cycle and enhancing overall financial performance.