Illumina Inc (ILMN)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.78 | 1.66 | 1.28 | 2.48 | 3.60 |
| Quick ratio | 1.26 | 1.14 | 0.98 | 1.82 | 3.18 |
| Cash ratio | 0.79 | 0.67 | 0.73 | 1.23 | 2.79 |
Over the years from 2020 to 2024, Illumina Inc's liquidity ratios have shown some fluctuations.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 3.60 in 2020 to 1.78 in 2024. This indicates that Illumina's current assets may have decreased relative to its current liabilities over the period, which could raise concerns about its short-term financial health.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also experienced a decline from 3.18 in 2020 to 1.26 in 2024. This suggests that Illumina may have become less capable of meeting its short-term obligations without relying on the sale of inventory.
Furthermore, the cash ratio, which focuses solely on the most liquid assets, decreased from 2.79 in 2020 to 0.79 in 2024. This suggests that Illumina's cash and cash equivalents may have declined relative to its current liabilities, which could potentially indicate a reduced ability to cover immediate obligations.
Overall, based on these liquidity ratios, Illumina Inc's ability to meet its short-term financial obligations may have weakened over the years, although it still maintains a reasonably strong liquidity position. Investors and stakeholders should further investigate the company's financial health and consider the reasons behind these liquidity ratio trends.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 140.11 | 130.41 | 115.70 | 78.60 | 118.30 |
The cash conversion cycle for Illumina Inc has fluctuated over the past five years, indicating variations in the company's efficiency in managing its working capital.
As of December 31, 2020, the cash conversion cycle stood at 118.30 days, suggesting that Illumina took approximately 118 days to convert its investments in inventory and accounts receivable into cash inflows.
By December 31, 2021, the cash conversion cycle improved to 78.60 days, indicating a more efficient conversion of working capital into cash. This could be attributed to better inventory management or faster collection of accounts receivable.
However, there was a reversal in efficiency by December 31, 2022, with the cash conversion cycle increasing to 115.70 days. This uptick may signal challenges in working capital management, potentially leading to increased cash tied up in operations.
The trend continued to worsen by December 31, 2023, when the cash conversion cycle extended to 130.41 days. A longer cash conversion cycle could imply slower cash inflows relative to outflows, possibly impacting liquidity and overall financial health.
The latest data point as of December 31, 2024, reflects a further deterioration in efficiency, with the cash conversion cycle reaching 140.11 days. It is essential for Illumina to closely monitor and address the drivers behind this trend to optimize its working capital management and enhance cash flow generation.