Cadence Design Systems Inc (CDNS)

Liquidity ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 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 1.74 1.70 1.60 1.45
Quick ratio 1.02 1.14 1.10 1.19 1.02 1.13 1.36 1.56 1.47 1.48 1.33 1.43 1.60 1.44 1.31 1.22 1.51 1.51 1.43 1.28
Cash ratio 0.72 0.81 0.73 0.78 0.66 0.82 0.99 1.18 1.13 1.12 0.91 0.94 1.17 1.17 1.04 0.94 1.06 1.06 1.04 0.86

Cadence Design Systems, Inc.'s liquidity ratios indicate its ability to meet short-term obligations and manage cash flow effectively. The current ratio, which measures the company's ability to pay off its current liabilities with its current assets, has been relatively stable over the quarters, ranging from 1.24 to 1.81. A current ratio above 1 indicates that the company has more current assets than current liabilities, reflecting a healthy liquidity position.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows consistency in Cadence Design Systems' liquidity position, ranging from 1.13 to 1.69. This ratio indicates that the company has a sufficient level of liquid assets to cover its short-term obligations without relying on inventory sales.

The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, portrays a similar trend. The cash ratio ranges from 0.82 to 1.31, suggesting that Cadence Design Systems has enough liquid assets to cover its current liabilities, albeit with a tighter margin compared to the other ratios.

Overall, the liquidity ratios of Cadence Design Systems, Inc. indicate that the company has maintained a solid liquidity position throughout the quarters, with the ability to meet its short-term obligations and manage cash effectively.

See also:

Cadence Design Systems Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 109.43 100.13 95.13 98.11 101.25 88.61 89.39 90.40 93.26 86.22 91.83 87.82 83.66 68.47 70.11 76.25 78.81 82.46 68.27 66.43

The cash conversion cycle of Cadence Design Systems, Inc. has varied over the recent quarters. In Q4 2023, the company's cash conversion cycle decreased to 119.56 days, reflecting an improvement in the efficiency of its cash management compared to the previous quarter. This reduction indicates that Cadence Design Systems was able to convert its investments in inventory and receivables into cash at a faster rate during this period.

However, in Q3 and Q2 2023, the cash conversion cycle was considerably higher at 180.47 days and 168.93 days, respectively, suggesting a slower conversion of investments into cash and highlighting potential inefficiencies in managing working capital. In Q1 2023, there was a slight improvement with a cash conversion cycle of 165.32 days compared to the previous quarters.

Comparing to the same quarters in 2022, it can be observed that the cash conversion cycle fluctuated throughout the year. Notably, there was an increase in the cash conversion cycle in Q4 2022 to 175.60 days, which then saw a decrease in the following quarters. Overall, Cadence Design Systems should focus on optimizing its inventory and accounts receivable management to further enhance its cash conversion cycle efficiency and overall working capital performance.