CEVA Inc (CEVA)

Based on the provided data, let's analyze the liquidity ratios of CEVA Inc over the five-year period:

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term obligations with its current assets.
- CEVA Inc's current ratio has remained consistently strong over the years, ranging from 5.33 in 2021 to 7.79 in 2023.
- A current ratio above 1 indicates that the company's current assets exceed its current liabilities, suggesting a healthy liquidity position.
- CEVA Inc's current ratio above 5 indicates a comfortable liquidity position, allowing the company to easily meet its short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity that excludes inventory from current assets.
- CEVA Inc's quick ratio has also shown a similar trend to the current ratio, ranging from 4.37 in 2021 to 6.19 in 2023.
- A quick ratio above 1 indicates the company can cover its short-term obligations without relying on the sale of inventory.
- CEVA Inc's quick ratio above 4 indicates a strong ability to meet short-term liabilities using its most liquid assets.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity measure, considering only cash and cash equivalents to cover current liabilities.
- CEVA Inc's cash ratio has mirrored the trends of the current and quick ratios, showing solid liquidity positions from 4.19 in 2022 to 6.19 in 2023.
- A cash ratio above 1 implies that the company can pay off its current liabilities using only cash and cash equivalents.
- CEVA Inc's cash ratio above 4 indicates that the company holds sufficient cash reserves to meet its short-term obligations comfortably.

In conclusion, based on the analysis of the current, quick, and cash ratios, CEVA Inc has maintained a robust liquidity position over the five-year period, with ratios consistently above industry norms. This indicates the company's ability to efficiently manage its short-term obligations and suggests a healthy financial position in terms of liquidity.

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Additional liquidity measure

Based on the provided data, the cash conversion cycle for CEVA Inc has remained consistently at 0.00 days from December 31, 2020, through December 31, 2024. A cash conversion cycle of 0.00 days indicates that the company is efficiently managing its working capital by quickly converting inventory into cash from sales without experiencing delays in paying suppliers.

This efficient management of the cash conversion cycle suggests that CEVA Inc is effectively managing its operations, inventory levels, accounts receivable, and accounts payable. An extremely low or zero cash conversion cycle can signify strong liquidity, effective cash flow management, and potentially lower financing costs.

Overall, the consistent 0.00 days cash conversion cycle for CEVA Inc demonstrates the company's ability to efficiently convert its resources, such as inventory and accounts receivable, into cash, which is a positive indication of its operational efficiency and financial health.