InterDigital Inc (IDCC)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.33 | 4.96 | 2.83 | 3.39 | 3.33 |
| Quick ratio | 1.30 | 4.86 | 2.77 | 3.37 | 3.15 |
| Cash ratio | 1.14 | 4.43 | 2.53 | 3.13 | 3.03 |
Interdigital Inc's liquidity ratios have shown some fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 4.96 in 2022 to 1.33 in 2023, indicating a significant decrease in liquidity.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also decreased from 4.91 in 2022 to 1.32 in 2023, reflecting a decline in the company's ability to meet its short-term liabilities without relying on inventory.
The cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) compared to current liabilities, decreased from 4.47 in 2022 to 1.16 in 2023. This downward trend in the cash ratio suggests that Interdigital Inc may have less cash available to cover its immediate obligations compared to previous years.
Overall, the decreasing trend in all three liquidity ratios indicates a potential deterioration in Interdigital Inc's ability to meet its short-term financial obligations. It may be important for the company to closely monitor its liquidity position and take necessary steps to improve its liquidity levels to ensure financial stability in the future.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 201.19 | 105.33 | 343.99 | 77.10 | 49.39 |
The cash conversion cycle of Interdigital Inc has fluctuated over the past five years, indicating varying efficiency in managing its working capital and cash flow. In 2023, the company's cash conversion cycle was 91.07 days, showing an improvement from the previous year but remaining higher compared to 2021. This suggests that Interdigital took slightly less time to convert its investments in inventory and receivables into cash during 2023.
In 2022, the cash conversion cycle was 106.00 days, indicating a longer period compared to 2021. This suggests that the company faced challenges in converting its inventory and receivables into cash efficiently during that year. The decrease in the cash conversion cycle in 2021 to 75.71 days reflects an improvement in working capital management compared to 2020 when the cycle was 87.03 days.
Notably, there was a significant decrease in the cash conversion cycle in 2019 to 32.36 days, indicating a very efficient cash conversion process that year. Overall, fluctuations in the cash conversion cycle of Interdigital Inc over the past five years suggest varying effectiveness in managing working capital, inventory, and receivables, impacting the company's cash flow and liquidity position.