Harmonic Inc (HLIT)
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 | 1.21 | 1.20 | 1.15 | 1.11 | 1.07 | 1.52 | 1.52 | 1.41 | 1.44 | 1.43 | 1.62 | 1.35 | 1.62 | 1.47 | 1.43 | 1.18 | 1.31 | 1.62 | 1.34 | 1.35 |
| Quick ratio | 0.83 | 0.70 | 0.66 | 0.59 | 0.61 | 0.95 | 0.55 | 0.44 | 0.99 | 0.63 | 0.62 | 0.52 | 1.12 | 1.09 | 1.05 | 0.88 | 0.98 | 1.19 | 0.93 | 1.01 |
| Cash ratio | 0.31 | 0.30 | 0.25 | 0.30 | 0.28 | 0.47 | 0.55 | 0.44 | 0.59 | 0.63 | 0.62 | 0.52 | 0.67 | 0.49 | 0.53 | 0.36 | 0.48 | 0.46 | 0.42 | 0.52 |
Harmonic, Inc.'s liquidity ratios show fluctuations over the past eight quarters. The current ratio has been above 1, indicating the company's ability to cover its short-term obligations with a comfortable margin. However, it has been decreasing gradually from 1.52 in Q3 2022 to 1.21 in Q4 2023.
The quick ratio, which excludes inventory from current assets, has also been declining, indicating that the company may have more difficulty meeting its short-term obligations without relying on inventory. It decreased from 1.15 in Q2 2022 to 0.91 in Q4 2023.
The cash ratio, which is the most conservative liquidity measure, shows a decreasing trend from 0.67 in Q2 2022 to 0.39 in Q4 2023. This indicates that cash and cash equivalents are becoming a smaller portion of the company's current assets, potentially limiting its ability to cover immediate liabilities with cash on hand.
Overall, while Harmonic, Inc. has maintained current ratios above 1, the decreasing trend in quick ratios and cash ratios raises concerns about its liquidity position. Management may need to closely monitor its liquidity levels and consider strategies to improve short-term cash reserves to ensure the company can meet its financial obligations efficiently.
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 | 122.01 | 113.65 | 130.82 | 112.69 | 106.96 | 93.68 | 37.08 | 26.14 | 70.92 | 19.36 | 5.64 | -0.68 | 80.37 | 94.43 | 78.20 | 82.61 | 75.78 | 100.91 | 64.39 | 67.13 |
The cash conversion cycle for Harmonic, Inc. has shown some variation over the past eight quarters, ranging from 107.66 days to 161.59 days. A lower cash conversion cycle indicates that the company is able to convert its inventory into cash more quickly, thus efficiently managing its working capital.
Analyzing the trend, we see that in the most recent quarter (Q4 2023), the cash conversion cycle increased to 141.11 days from 138.13 days in Q3 2023. This suggests a slight decline in the efficiency of the company's working capital management compared to the previous quarter. However, it is important to note that the current cash conversion cycle is still lower than the levels seen in Q2 and Q3 of 2023, indicating that Harmonic, Inc. has made some improvements in this aspect.
Overall, Harmonic, Inc. should continue to monitor and manage its cash conversion cycle to ensure optimal efficiency in converting its investments in inventory and accounts receivable into cash. This can help the company maintain a healthy cash flow and improve its overall financial performance.