IPG Photonics Corporation (IPGP)
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 | 6.98 | 8.09 | 9.02 | 9.52 | 8.91 | 8.74 | 8.43 | 7.68 | 7.23 | 7.16 | 6.87 | 8.16 | 7.49 | 7.94 | 8.95 | 10.25 | 10.01 | 10.09 | 9.99 | 9.59 |
| Quick ratio | 4.54 | 5.25 | 5.59 | 5.93 | 5.48 | 5.16 | 4.80 | 4.29 | 4.29 | 4.17 | 3.91 | 5.06 | 4.83 | 5.19 | 5.85 | 6.73 | 6.48 | 6.46 | 6.40 | 6.12 |
| Cash ratio | 4.54 | 5.25 | 5.59 | 5.93 | 5.48 | 5.16 | 4.80 | 4.29 | 4.29 | 4.17 | 3.91 | 5.06 | 4.83 | 5.19 | 5.85 | 6.73 | 6.48 | 6.46 | 6.40 | 6.12 |
IPG Photonics Corporation's liquidity ratios show a generally strong position over the period from March 2020 to December 2024.
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, remained consistently high, ranging from 6.87 to 10.25. Although there was a slight decline in the current ratio towards the end of the period, it stayed above 6, indicating that IPG Photonics had a significant buffer to meet its immediate obligations.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. This ratio ranged from 3.91 to 6.73, showing a similar trend of gradual decline towards the end of the period. Despite this decline, the quick ratio remained above 3, signifying that the company had an adequate level of highly liquid assets to cover its short-term liabilities.
The cash ratio, which is the most conservative liquidity measure as it only includes cash and cash equivalents, mirrored the trends seen in the quick ratio. The ratio fluctuated between 3.91 and 6.73, indicating that IPG Photonics had a solid level of cash reserves to meet its immediate financial obligations throughout the period.
Overall, based on these liquidity ratios, IPG Photonics Corporation demonstrated a strong ability to meet its short-term obligations and maintained a robust liquidity position over the analyzed period.
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 | 166.32 | 176.00 | 223.51 | 225.39 | 222.31 | 210.07 | 207.60 | 210.84 | 212.69 | 253.50 | 255.75 | 226.64 | 219.99 | 210.12 | 202.79 | 192.80 | 201.33 | 206.56 | 201.52 | 192.61 |
IPG Photonics Corporation's cash conversion cycle has shown fluctuations over the months, indicating changes in its operational efficiency. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 166.32 days to a high of 255.75 days. Generally, a shorter cash conversion cycle is favorable as it indicates that the company is efficiently managing its working capital and quickly turning its inventory into cash.
IPG Photonics Corporation experienced a decreasing trend in the cash conversion cycle from Q1 2022 to Q4 2024, indicating improved efficiency in managing its working capital. However, there was a sudden decrease in the cycle in Q3 and Q4 of 2024, which could suggest potential issues in inventory management or delays in collecting receivables.
Overall, fluctuations in the cash conversion cycle may highlight changes in IPG Photonics Corporation's operations and financial performance. It is essential for the company to closely monitor and manage its working capital components to ensure optimal efficiency in cash conversion.