Garmin Ltd (GRMN)

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 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 2.95 2.64 2.39 4.04
Quick ratio 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 2.04 1.76 1.60 2.84
Cash ratio 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 1.36 1.22 1.03 2.11

Based on the provided data, Garmin Ltd's liquidity ratios have exhibited fluctuations over the past few quarters.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has generally been above 2.5, indicating a healthy liquidity position. However, there have been periods where the current ratio dipped slightly below this level, particularly in the mid of 2022. The most recent figure of 3.41 as of December 31, 2023, shows a significant improvement in liquidity compared to previous quarters.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has varied between 1.42 and 2.68. The quick ratio tends to be lower than the current ratio but provides a clearer picture of immediate liquidity. The company's quick ratio has generally been above 1.5, suggesting that Garmin Ltd has a comfortable level of liquid assets to cover its short-term liabilities.

The cash ratio, which indicates the proportion of current liabilities that can be covered by cash and cash equivalents alone, has ranged from 0.99 to 2.11. This ratio provides the most conservative assessment of liquidity since it focuses solely on the most liquid assets. The cash ratio has mostly remained above 1, indicating that Garmin Ltd has sufficient cash reserves to meet its short-term obligations if needed.

Overall, while there have been some fluctuations in Garmin Ltd's liquidity ratios over the quarters, the company has generally maintained a strong liquidity position. The latest data as of December 31, 2023, shows an improvement in liquidity levels compared to previous quarters, as indicated by the higher current ratio, quick ratio, and cash ratio.

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 194.90 204.02 207.28 174.71 215.67 219.87 205.93 184.42 183.57 154.46 143.26 135.14 153.70 159.07 159.48 149.62 159.19 152.15 143.76 130.53

The cash conversion cycle of Garmin Ltd has shown fluctuations over the past few quarters. The company's cash conversion cycle demonstrates the number of days it takes to convert its inventory and accounts receivable into cash, while also taking into account the days it takes to pay its accounts payable.

For the year 2023, the cash conversion cycle started at 174.71 days in March, increased to 207.28 days by June, and then decreased to 194.90 days by the end of December. This indicates that the company initially took longer to convert its resources into cash, but managed to improve its efficiency in the latter part of the year.

Comparing to previous years, the cash conversion cycle has generally been on the higher side, with the highest value recorded at 219.87 days in September 2022 and the lowest at 130.53 days in March 2019. This suggests that Garmin Ltd has been facing challenges in managing its working capital efficiently, leading to longer cash conversion cycles.

Analyzing the trend over time can help identify areas where the company may need to focus on improving its inventory management, accounts receivable collection, or payment practices to optimize its cash conversion cycle and enhance its overall liquidity position.