Garmin Ltd (GRMN)

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 3.54 3.30 2.89 4.04 3.41 3.13 2.84 3.93 3.26 2.75 2.54 3.54 2.94 2.92 2.66 3.81 3.15 2.98 2.80 3.75
Quick ratio 2.31 2.12 1.87 2.59 2.12 1.82 1.65 1.54 1.74 1.46 1.42 2.08 1.86 1.91 1.86 2.68 2.32 2.06 1.94 2.48
Cash ratio 1.66 1.54 1.37 1.97 1.50 1.28 1.16 1.54 1.20 1.01 0.99 1.56 1.27 1.44 1.35 2.08 1.59 1.47 1.49 1.84

Garmin Ltd's liquidity ratios show a strong position over the analyzed periods. The current ratio, a measure of the company's ability to cover its short-term liabilities with its short-term assets, has generally remained comfortably above 2. This indicates that Garmin has had more than enough current assets to cover its current obligations. The current ratio improved over the years, reaching a high of 4.04 on March 31, 2024.

The quick ratio, also known as the acid-test ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, shows a similar pattern. While fluctuating slightly more than the current ratio, the quick ratio has generally been above 1, indicating Garmin's ability to meet its short-term obligations without relying on selling inventory. The quick ratio improved in recent periods, reaching a high of 2.59 on March 31, 2024.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents to cover current liabilities, has also been strong for Garmin. The company has consistently maintained a cash ratio above 1, demonstrating a solid ability to settle its short-term debt obligations with cash on hand. The cash ratio improved over the years, peaking at 1.97 on March 31, 2024.

Overall, Garmin Ltd's liquidity ratios indicate a healthy financial position with sufficient short-term assets to cover its short-term liabilities, suggesting a strong ability to meet its financial obligations as they come due.

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 165.93 172.98 158.64 165.90 184.43 192.20 194.94 160.53 215.67 219.87 205.93 184.42 183.57 154.46 143.26 135.14 153.70 159.07 159.48 149.62

The cash conversion cycle of Garmin Ltd has shown some fluctuations over the periods provided. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle varied significantly, ranging from a low of 135.14 days on March 31, 2021, to a high of 219.87 days on September 30, 2022.

During the period analyzed, the cash conversion cycle trended upward until September 30, 2022, indicating potentially slower conversions of inventory and receivables into cash. This could suggest issues with managing working capital efficiency or potential delays in receiving payments from customers.

However, there was a slight improvement in the cash conversion cycle from the peak on September 30, 2022, down to 158.64 days on June 30, 2024, and 165.93 days on December 31, 2024. This improvement may indicate more effective management in converting assets into cash during these periods.

Overall, monitoring the cash conversion cycle is crucial for assessing a company's liquidity and efficiency in managing its working capital. fluctuations in the cash conversion cycle could indicate potential operational challenges or improvements in the company's cash flow management.