Lam Research Corp (LRCX)

Lam Research Corp's liquidity ratios have exhibited some fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has ranged from 2.69 to 3.43, with the highest value recorded in 2020.

The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets. Lam Research Corp's quick ratio has varied from 1.75 to 2.78, showing a declining trend over the period.

The cash ratio, representing the proportion of current liabilities that can be covered by the company's cash and cash equivalents, has fluctuated between 0.80 and 2.12. Lam Research Corp's cash ratio peaked in 2020 before declining in the subsequent years.

Overall, the current ratio indicates that the company has generally maintained a strong ability to meet its short-term obligations, although there has been a slight decrease in recent years. The quick ratio and cash ratio show a similar trend of decreased liquidity in terms of the quick assets available to cover immediate liabilities. This analysis suggests that while Lam Research Corp remains relatively liquid, there may be a slight decline in its ability to meet short-term obligations quickly without relying on inventory.

---

See also:

Lam Research Corp Liquidity Ratios

---

Additional liquidity measure

The cash conversion cycle of Lam Research Corp has shown a fluctuating trend over the past five years. The cycle measures the time it takes for the company to convert its investments in inventory into cash received from sales.

In Jun 2020 and Jun 2021, Lam Research Corp had a relatively stable cash conversion cycle of around 152 days. However, in Jun 2022, the cycle increased to 194.39 days, indicating a potential inefficiency in managing inventory and collecting cash from sales.

This trend continued in Jun 2023, with a slightly higher cycle of 204.68 days. Notably, in Jun 2024, the cash conversion cycle further extended to 205.60 days, suggesting a longer period between cash outflows for inventory and cash inflows from sales.

Overall, the increasing trend in the cash conversion cycle of Lam Research Corp over the past few years may indicate potential challenges in managing working capital effectively. The company may need to focus on optimizing inventory levels and improving collection processes to shorten the cycle and enhance its cash flow efficiency.