Lattice Semiconductor Corporation (LSCC)

The liquidity ratios of Lattice Semiconductor Corporation have shown varying levels of performance over the past five years.

Current ratio, which measures the company's ability to meet short-term obligations with its current assets, has generally been healthy, with a noticeable increase from 2.63 in 2019 to 3.78 in 2023. This indicates that the company has improved its ability to cover its short-term liabilities with its current assets.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of a company's liquidity by excluding inventory from current assets. Lattice Semiconductor Corporation's quick ratio has also demonstrated positive trends over the years, with a significant increase from 1.83 in 2019 to 2.39 in 2023. This suggests that the company has enhanced its ability to meet its short-term obligations without relying on inventory.

Lastly, the cash ratio, which evaluates the ability of a company to cover its current liabilities with its cash and cash equivalents, has displayed reasonable stability over the years, albeit with some fluctuations. The ratio has generally remained above 1, indicating that the company has sufficient cash to cover its short-term obligations, although there was a notable dip in 2020 before recovering in subsequent years.

Overall, Lattice Semiconductor Corporation's liquidity ratios suggest a positive trend in its ability to meet short-term obligations and manage liquidity effectively, with improvements seen in current ratio and quick ratio, and reasonable stability in the cash ratio.

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Additional liquidity measure

Lattice Semiconductor Corporation's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has fluctuated over the past five years.

In 2023, the company's cash conversion cycle improved to 115.67 days compared to the previous year's 126.84 days, indicating that Lattice Semiconductor has become more efficient in managing its working capital. This is a positive sign as a shorter cash conversion cycle means the company is able to generate cash more quickly from its operating activities.

Looking back further, the trend reveals some variability in the cash conversion cycle. In 2021, the cycle decreased significantly to 96.83 days, showing improved efficiency in managing inventory and collecting receivables. However, in 2022 and 2020, the cycle increased to 126.84 days and 109.03 days, respectively, indicating potential challenges in managing working capital efficiently during those years.

It's worth noting that in 2019, Lattice Semiconductor achieved its shortest cash conversion cycle of 75.24 days, signaling strong performance in converting investments into cash during that period.

Overall, while the company has demonstrated some fluctuations in its cash conversion cycle over the past five years, the recent improvement in 2023 suggests a positive trend towards more efficient working capital management.