InterDigital Inc (IDCC)
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 | 1.33 | 2.82 | 2.67 | 4.70 | 4.96 | 4.66 | 4.45 | 3.24 | 2.83 | 2.69 | 3.94 | 3.89 | 3.39 | 3.25 | 4.52 | 4.71 | 3.33 | 3.06 | 3.87 | 1.95 |
| Quick ratio | 1.30 | 2.60 | 2.06 | 4.00 | 4.86 | 3.19 | 4.14 | 3.09 | 2.77 | 2.27 | 3.77 | 3.77 | 3.37 | 2.90 | 4.12 | 4.20 | 3.15 | 2.83 | 3.42 | 1.77 |
| Cash ratio | 1.14 | 2.43 | 1.88 | 3.74 | 4.43 | 2.97 | 3.87 | 2.91 | 2.53 | 2.15 | 3.57 | 3.49 | 3.13 | 2.90 | 4.12 | 4.20 | 3.03 | 2.83 | 3.42 | 1.77 |
Interdigital Inc's liquidity ratios provide insight into the company's ability to meet its short-term financial obligations.
1. Current Ratio:
- The current ratio measures Interdigital's ability to cover its short-term liabilities with its current assets.
- Over the last eight quarters, the company's current ratio has ranged from 1.33 to 4.70, showing some fluctuations.
- A current ratio of over 1 indicates that the company can cover its current liabilities with its current assets.
2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, excludes inventory from current assets to provide a more conservative measure of liquidity.
- Interdigital's quick ratio has also shown variability, ranging from 1.32 to 4.65.
- Similar to the current ratio, a quick ratio above 1 indicates sufficient liquidity to cover short-term obligations.
3. Cash Ratio:
- The cash ratio focuses on the most liquid assets, such as cash and cash equivalents, to evaluate the company's ability to pay off its current liabilities immediately.
- Interdigital's cash ratio has fluctuated between 1.16 and 3.82 over the past two years.
- A cash ratio above 1 reflects that the company has enough cash on hand to cover current liabilities without relying on the sale of inventory.
Overall, Interdigital Inc has maintained healthy liquidity ratios across all three metrics, indicating a strong ability to meet its short-term financial commitments. However, the fluctuations in the ratios over time may warrant further monitoring to ensure consistent liquidity management.
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 | 196.38 | 182.10 | 221.79 | 49.04 | 106.73 | 170.36 | 153.29 | 114.36 | 343.87 | 105.45 | 117.47 | 164.97 | 75.40 | 0.00 | 0.00 | 0.00 | 45.09 | 0.00 | 0.00 | 0.00 |
The cash conversion cycle of Interdigital Inc has exhibited significant fluctuations over the past eight quarters, ranging from a low of 64.83 days in Q1 2022 to a high of 376.77 days in Q3 2022. In Q4 2023, the cash conversion cycle stands at 91.07 days, indicating an improvement from the previous quarter.
The cash conversion cycle measures the amount of time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is able to quickly convert its investments into cash, enhancing liquidity and operational efficiency.
The improvement in the cash conversion cycle in Q4 2023 suggests that Interdigital Inc may have implemented more effective inventory management practices or streamlined its accounts receivable processes. However, the company experienced a significant increase in the cash conversion cycle in Q2 2023, which may indicate challenges in managing working capital efficiently during that period.
Overall, Interdigital Inc's management should continue to monitor and optimize the cash conversion cycle to maintain strong liquidity and operational performance in the future.