Illumina Inc (ILMN)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.78 | 2.43 | 1.11 | 1.75 | 1.66 | 1.69 | 1.40 | 1.42 | 1.28 | 0.93 | 1.00 | 1.85 | 2.48 | 2.68 | 6.08 | 4.45 | 3.60 | 3.88 | 3.76 | 4.10 |
| Quick ratio | 1.26 | 1.68 | 0.74 | 1.19 | 1.14 | 1.10 | 1.00 | 0.68 | 0.98 | 0.39 | 0.46 | 0.95 | 1.82 | 1.38 | 4.90 | 3.65 | 2.79 | 2.98 | 2.93 | 3.16 |
| Cash ratio | 0.79 | 0.96 | 0.45 | 0.76 | 0.67 | 0.63 | 0.68 | 0.68 | 0.73 | 0.39 | 0.46 | 0.95 | 1.23 | 1.38 | 4.90 | 3.65 | 2.79 | 2.98 | 2.93 | 3.16 |
The liquidity ratios of Illumina Inc, as reflected in the data provided, indicate fluctuations in the company's short-term financial health over the reporting periods.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, was relatively strong in the earlier periods, exceeding 3. However, there has been a declining trend since March 31, 2022, reaching a low point of 0.93 on September 30, 2022. Although there was some improvement in liquidity thereafter, with a peak of 2.43 on September 30, 2024, the ratio still remained below the levels seen in the earlier periods.
The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets. Similar to the current ratio, the quick ratio experienced a decline over the reporting periods, with notable drops below 1 during the June 30, 2022 to December 31, 2023 timeframe. There was some recovery in the quick ratio towards the latter part of the data, but it remained below the levels seen in the earlier years.
The cash ratio, which is the most conservative measure of liquidity as it considers only cash and cash equivalents to cover liabilities, followed a similar trend to the quick ratio. A notable drop in the cash ratio was observed from March 31, 2021 to March 31, 2022, with the ratio falling below 1 during the June 30, 2022 to December 31, 2023 periods. Subsequently, there was some improvement in the cash ratio, but it did not reach the levels observed in the initial periods.
In conclusion, the liquidity ratios of Illumina Inc indicate a fluctuating trend with periods of weakness, especially in the mid to late reporting periods. It suggests a need for the company to closely monitor its short-term liquidity position and implement appropriate strategies to ensure its ability to meet financial obligations promptly.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 140.11 | 146.43 | 131.33 | 132.11 | 130.45 | 135.89 | 141.43 | 76.75 | 115.71 | 64.10 | 56.56 | 43.74 | 78.58 | 42.50 | 52.81 | 60.35 | 63.42 | 94.25 | 110.16 | 87.96 |
The cash conversion cycle of Illumina Inc, a measure of how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has shown significant fluctuations over the period from March 31, 2020, to December 31, 2024.
Initially, the company had a cash conversion cycle of around 87.96 days as of March 31, 2020, which increased to 110.16 days by June 30, 2020. Subsequently, there was a decrease in the cycle to 52.81 days by June 30, 2021, indicating an improvement in efficiency. However, the cycle increased again to 146.43 days by September 30, 2024, before moderating slightly to 140.11 days by December 31, 2024.
The fluctuations in the cash conversion cycle suggest varying trends in inventory management, accounts receivable collection, and accounts payable management within Illumina Inc. A longer cash conversion cycle may indicate inefficiencies in working capital management, tying up cash in operations for a longer period. Conversely, a shorter cycle signifies improved liquidity and efficiency in converting investments into cash.
Overall, monitoring and managing the cash conversion cycle is critical for Illumina Inc to optimize its working capital, improve cash flow management, and enhance overall financial performance.