Cadence Design Systems Inc (CDNS)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 2.93 2.45 1.43 1.32 1.24 1.44 1.37 1.44 1.27 1.33 1.59 1.81 1.77 1.70 1.57 1.70 1.86 1.55 1.42 1.38
Quick ratio 2.03 1.73 0.80 0.79 0.72 0.76 0.73 0.78 0.66 0.82 0.99 1.18 1.13 1.12 0.91 0.94 1.17 1.17 1.03 0.93
Cash ratio 2.03 1.73 0.80 0.79 0.72 0.76 0.73 0.78 0.66 0.82 0.99 1.18 1.13 1.12 0.91 0.94 1.17 1.17 1.03 0.93

Cadence Design Systems Inc's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio has shown fluctuation over the years, ranging from a low of 1.24 in December 2023 to a high of 2.93 in December 2024. Generally, a current ratio above 1 suggests that the company has more current assets than current liabilities, with December 2024 being particularly strong in this aspect.

The quick ratio, which excludes inventory from current assets, paints a more conservative picture of liquidity. It has also varied over time, reaching a low of 0.66 in December 2022 and a high of 2.03 in December 2024. A quick ratio above 1 is typically considered adequate for most companies, indicating the ability to cover immediate liabilities without relying on selling inventory.

The cash ratio, which is the most stringent measure of liquidity, shows how well the company can meet its current liabilities using only cash and cash equivalents. Similar to the quick ratio, the cash ratio has fluctuated, with a range of 0.66 in December 2022 to 2.03 in December 2024. A cash ratio above 1 is considered strong liquidity.

Overall, Cadence Design Systems Inc has maintained generally healthy liquidity levels over the years, with some fluctuations. The company appears to have improved its liquidity position by the end of 2024, as indicated by the significant increases in the current, quick, and cash ratios.

See also:

Cadence Design Systems Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 239.51 243.84 126.41 152.00 150.69 140.78 126.59 116.91 125.72 119.93 115.28 125.37 137.60 119.28 104.34 88.75 90.75 57.36 56.46 81.82

The cash conversion cycle of Cadence Design Systems Inc has shown fluctuations over the past few years. From March 2020 to December 2024, the company's cash conversion cycle ranged from a low of 56.46 days to a high of 243.84 days.

A lower cash conversion cycle indicates that the company is able to convert its investments in raw materials and production back into cash more quickly, which can be a positive sign of efficiency. On the other hand, a higher cash conversion cycle suggests that the company may be facing challenges in managing its working capital effectively.

It is important for Cadence Design Systems Inc to closely monitor its cash conversion cycle and work towards optimizing it to ensure efficient use of its resources and maintain healthy liquidity levels. Furthermore, analyzing the factors contributing to the fluctuations in the cash conversion cycle can help the company identify areas for improvement in its operations and cash flow management.