Keysight Technologies Inc (KEYS)

Keysight Technologies Inc's liquidity ratios have shown some fluctuations over the past five years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been healthy, ranging from 2.35 to 3.12. An upward trend in the current ratio indicates an improvement in the company's short-term liquidity position. The current ratio of 2.98 in 2024 suggests that Keysight has $2.98 in current assets for every $1 in current liabilities, reflecting a strong ability to meet its short-term obligations.

The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. Similarly to the current ratio, the quick ratio has also demonstrated a favorable trend, ranging from 1.69 to 2.28 over the past five years. The quick ratio of 1.98 in 2024 indicates that Keysight has $1.98 in highly liquid assets to cover each $1 of current liabilities, implying a strong liquidity position.

The cash ratio, which is the most stringent measure of liquidity, focuses solely on cash and cash equivalents relative to current liabilities. Keysight's performance in this ratio has been relatively consistent, ranging from 1.21 to 1.67. The cash ratio of 1.26 in 2024 implies that the company has $1.26 in cash and cash equivalents for every $1 of current liabilities, indicating a solid ability to meet short-term obligations with available cash reserves.

Overall, based on the trend analysis of these liquidity ratios, Keysight Technologies Inc appears to have maintained a strong liquidity position over the past five years, with the ability to meet its short-term obligations comfortably.

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Additional liquidity measure

The cash conversion cycle is a measure of how efficiently a company manages its working capital by assessing the time it takes to convert raw materials into cash received from sales. Keysight Technologies Inc's cash conversion cycle has shown some fluctuations over the last five years.

In 2024, the cash conversion cycle increased to 150.23 days from 142.03 days in 2023, indicating that the company took longer to convert its investments in inventory and other resources into cash. This may suggest potential delays in the collection of receivables or a buildup in inventory levels that could impact liquidity.

Comparing 2024 to 2022, there is a notable increase in the cash conversion cycle from 119.47 days to 150.23 days. This significant increase highlights a potential inefficiency in managing working capital and could signify challenges in turning investments into cash receipts promptly.

However, when comparing 2024 to 2020, there seems to be an improvement in efficiency, as the cash conversion cycle decreased from 122.03 days to 150.23 days. This decrease indicates that the company may have enhanced its management of working capital, resulting in a quicker turnaround of investments into cash.

Overall, Keysight Technologies Inc's cash conversion cycle has displayed fluctuations over the years, with some periods showing improvements in efficiency while others indicating potential challenges in managing working capital effectively. Further analysis of the underlying factors contributing to these variations would be necessary to understand the company's overall financial performance and liquidity position.