Intel Corporation (INTC)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.33 | 1.54 | 1.57 | 2.13 | 1.91 |
| Quick ratio | 0.79 | 1.02 | 1.01 | 0.60 | 0.61 |
| Cash ratio | 0.62 | 0.89 | 0.88 | 0.25 | 0.33 |
Intel Corporation's liquidity ratios indicate its ability to meet short-term obligations and cover immediate liabilities.
1. Current Ratio: This ratio measures the company's ability to cover short-term obligations with its current assets. Intel's current ratio has shown fluctuations over the years, ranging from 1.33 in 2024 to 2.13 in 2021. A ratio above 1 indicates the company can meet its current liabilities, with a higher ratio indicating stronger liquidity. However, a declining trend in the current ratio from 2021 to 2024 may raise concerns about Intel's ability to quickly pay off its short-term debts.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Intel's quick ratio has also varied, with values ranging from 0.60 in 2021 to 1.02 in 2023. A ratio of 1 or higher is generally considered a good indicator of liquidity. The fluctuation in Intel's quick ratio suggests changes in the composition of its current assets over the years, impacting its ability to cover short-term obligations without relying on inventory.
3. Cash Ratio: The cash ratio focuses on the most liquid assets, cash and cash equivalents, to assess the company's ability to cover its current liabilities. Intel's cash ratio has ranged from 0.25 in 2021 to 0.89 in 2023. A higher cash ratio implies a stronger ability to settle short-term obligations with cash on hand. Intel's cash ratio improvement from 2021 to 2023 indicates a positive trend in its cash position, although a slight decline in 2024 may warrant monitoring.
In conclusion, while Intel Corporation has shown fluctuations in its liquidity ratios over the years, maintaining ratios above 1 in most cases suggests the company generally has the ability to meet its short-term obligations. However, the declining trend in some ratios may indicate the need for Intel to manage its liquidity more effectively to ensure continued financial stability.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 38.79 | 46.80 | 54.59 | 83.98 | 57.28 |
The cash conversion cycle of Intel Corporation has shown fluctuations over the past five years. In December 2020, the company had a cash conversion cycle of 57.28 days, which increased to 83.98 days by December 2021, indicating a potential delay in converting sales into cash during that period.
However, there was a significant improvement in efficiency by December 2022, with the cash conversion cycle reduced to 54.59 days. This positive trend continued as of December 2023, where the cycle decreased further to 46.80 days, suggesting a more effective management of working capital.
By December 2024, Intel Corporation's cash conversion cycle reached its lowest point at 38.79 days, indicating a strong performance in converting inventories to cash. Overall, the company has managed to optimize its cash conversion cycle in recent years, leading to potential improvements in cash flow management and operational efficiency.