Illumina Inc (ILMN)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.66 | 1.28 | 2.48 | 3.60 | 6.69 |
| Quick ratio | 1.14 | 0.98 | 1.82 | 3.18 | 6.00 |
| Cash ratio | 0.67 | 0.73 | 1.23 | 2.79 | 5.13 |
Analyzing Illumina Inc's liquidity ratios over the past five years reveals fluctuations in the company's ability to meet its short-term obligations with its current assets. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has shown a general declining trend from 6.69 in 2019 to 1.66 in 2023. This indicates a reduction in the company's current assets relative to its current liabilities over the period.
Similarly, the quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, also demonstrates a decreasing trend from 6.15 in 2019 to 1.29 in 2023. This suggests a potential decrease in the company's ability to meet its short-term obligations using its most liquid assets.
The cash ratio, which provides an even more stringent measure of liquidity by considering only cash and cash equivalents, has also decreased over the period from 5.29 in 2019 to 0.82 in 2023. This indicates a significant reduction in Illumina Inc's ability to cover its short-term liabilities solely with its available cash reserves.
Overall, the declining trend in Illumina Inc's liquidity ratios raises concerns about the company's ability to efficiently manage its short-term financial obligations. Investors and stakeholders may need to closely monitor the company's liquidity position and management strategies to ensure financial stability and sustainability.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 130.41 | 115.70 | 78.60 | 118.30 | 130.27 |
The cash conversion cycle of Illumina Inc has shown variability over the past five years. In 2023, the cash conversion cycle increased to 139.04 days from the previous year's 123.18 days, indicating that the company took longer to convert its investments in inventory and receivables into cash during that period. This could suggest potential inefficiencies in managing working capital.
Comparing to 2022, where the cash conversion cycle was 80.03 days, the increase in 2023 could be a cause for concern as it signifies a significant elongation in the company's cash conversion process.
In 2021, the cash conversion cycle was 120.06 days, which was higher than the cycle in 2022 but lower than 2023. This could imply that the company made improvements in its working capital management that year.
In 2020 and 2019, the cash conversion cycle was 132.59 days and 75.63 days, respectively. The significant increase in 2020 compared to 2019 could have been due to various factors such as changes in the company's operating efficiency, inventory turnover, or collection period for receivables.
Overall, the trend in the cash conversion cycle of Illumina Inc indicates fluctuations in managing its working capital efficiently over the past five years. It is essential for the company to analyze the drivers behind these changes and work towards optimizing its cash conversion cycle to enhance its overall financial performance.