Enphase Energy Inc (ENPH)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 4.59 | 3.55 | 3.33 | 1.75 | 2.51 |
| Quick ratio | 4.02 | 3.22 | 3.07 | 1.61 | 1.99 |
| Cash ratio | 3.18 | 2.53 | 2.31 | 1.27 | 1.26 |
The liquidity ratios of Enphase Energy Inc have shown a consistent improvement over the years, indicating the company's strengthening ability to meet its short-term obligations and cover immediate financial needs.
The current ratio, which measures the company's ability to pay off its current liabilities with its current assets, has been increasing steadily from 1.75 in 2020 to 4.59 in 2023. This indicates that Enphase Energy has a higher level of current assets relative to its current liabilities, providing a cushion for short-term financial obligations.
The quick ratio, which is a more stringent measure of liquidity since it excludes inventory from current assets, also demonstrates an upward trend from 1.67 in 2020 to 4.19 in 2023. This suggests that the company has a strong ability to meet its immediate liabilities using its most liquid assets.
Furthermore, the cash ratio, which specifically measures the company's ability to cover its current liabilities with its cash and cash equivalents, has also improved consistently from 1.33 in 2020 to 3.35 in 2023. This indicates that Enphase Energy has a healthy level of cash reserves to manage its short-term financial obligations without relying on other current assets.
Overall, the trend of increasing liquidity ratios for Enphase Energy Inc reflects a positive liquidity position, indicating a healthy financial condition and ability to withstand short-term financial challenges.
See also:
Enphase Energy Inc Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 99.91 | 75.67 | 70.75 | 59.58 | 62.00 |
The cash conversion cycle of Enphase Energy Inc has been fluctuating over the past five years. In 2023, the company's cash conversion cycle increased to 99.91 days from 75.67 days in 2022. This suggests that the company took longer to convert its investments in inventory and accounts receivable into cash in 2023 compared to the prior year.
It is worth noting that over the five-year period, the cash conversion cycle reached its lowest point in 2020 at 59.58 days, indicating that the company was relatively efficient in managing its working capital that year. However, the cycle increased in subsequent years, with 2023 showing the longest cycle among the years analyzed.
Overall, Enphase Energy Inc may benefit from monitoring and improving its cash conversion cycle to ensure optimal efficiency in converting its operating activities into cash inflows.