Calix Inc (CALX)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 3.19 | 3.31 | 3.19 | 2.64 | 1.25 |
| Quick ratio | 1.85 | 2.03 | 2.26 | 2.01 | 0.81 |
| Cash ratio | 1.17 | 1.46 | 1.59 | 1.32 | 0.41 |
Calix Inc's liquidity ratios indicate the company's ability to meet short-term obligations and its overall financial health.
1. Current Ratio:
The current ratio measures the company's ability to pay off current liabilities with current assets. Calix Inc's current ratio has been consistently above 1 in the last five years, indicating a healthy liquidity position. The ratio has shown a positive trend, increasing from 1.25 in 2019 to 3.19 in 2023. This suggests that the company has more than enough current assets to cover its short-term liabilities.
2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. Calix Inc's quick ratio has also shown a positive trend over the years, increasing from 0.89 in 2019 to 2.48 in 2023. This indicates that the company has an improving ability to meet its short-term obligations without relying on inventory.
3. Cash Ratio:
The cash ratio measures the company's ability to pay off current liabilities with its cash and cash equivalents only. Calix Inc's cash ratio has also been increasing steadily over the years, indicating a stronger ability to cover short-term obligations with cash on hand. The ratio has increased from 0.49 in 2019 to 1.81 in 2023.
Overall, based on the liquidity ratios, Calix Inc has shown a strong improvement in its liquidity position over the years, with increasing current, quick, and cash ratios. This suggests that the company has a solid financial footing to meet its short-term obligations and operational needs.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 87.09 | 97.00 | 89.13 | 81.25 | 70.15 |
The cash conversion cycle of Calix Inc has shown fluctuations over the past five years. The cycle measures the average number of days it takes for a company to convert its investments in inventory and other resources into cash from sales.
In 2023, Calix Inc's cash conversion cycle decreased to 113.04 days from 130.41 days in 2022. This indicates an improvement in the efficiency of managing inventory, accounts receivable, and accounts payable. However, it is still higher compared to the cycle in 2020 and 2019.
The trend in the cash conversion cycle shows that Calix Inc may have experienced challenges in managing working capital efficiency in 2022, leading to a longer cycle. The decrease in the cycle in 2023 suggests that the company may have focused on streamlining its operations to speed up the conversion of assets into cash.
Overall, Calix Inc should continue to monitor and optimize its cash conversion cycle to improve liquidity and operational efficiency. A lower cycle indicates better management of working capital, which can positively impact the company's financial health and performance.