MKS Instruments Inc (MKSI)

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 3.19 3.42 3.58 3.69 3.18 3.31 3.27 3.14 2.93 2.76 5.14 5.18 4.67 4.56 5.05 5.17 4.83 4.58 4.46 4.53
Quick ratio 1.34 1.34 1.49 1.97 1.31 1.76 1.66 1.66 1.71 1.60 3.39 3.52 3.23 3.03 3.50 3.58 3.29 2.96 2.81 2.75
Cash ratio 0.54 0.56 0.68 1.17 0.60 1.03 0.91 1.01 0.96 0.88 2.33 2.42 2.27 2.01 2.47 2.45 2.24 1.96 1.73 1.57

Based on the provided data, I have analyzed the liquidity ratios of MKS Instruments Inc over the past five years.

1. Current Ratio: The current ratio measures the company's ability to pay its short-term obligations with its short-term assets. The current ratio for MKS Instruments Inc has been consistently above 2, indicating a strong liquidity position. The ratio ranged from a high of 5.18 on March 31, 2022, to a low of 2.76 on September 30, 2022, but has generally been well above 2 throughout the period analyzed.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. MKS Instruments Inc has maintained a solid quick ratio above 1, which is considered healthy. The quick ratio ranged from a high of 3.58 on March 31, 2021, to a low of 1.31 on December 31, 2023, showing some fluctuations but generally staying above the acceptable threshold.

3. Cash Ratio: The cash ratio indicates the company's ability to cover its current liabilities with its cash and cash equivalents alone. MKS Instruments Inc has generally maintained a cash ratio above 1, demonstrating a strong ability to meet its short-term obligations with cash on hand. The ratio ranged from a high of 2.47 on June 30, 2021, to a low of 0.54 on December 31, 2024, showing some variability but remaining above 1 for most of the period.

Overall, based on the current, quick, and cash ratios analyzed, MKS Instruments Inc appears to have good liquidity levels over the past five years. The company has shown a consistent ability to cover its short-term liabilities with its current assets and cash reserves, indicating a healthy financial position in terms of liquidity.

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 132.21 142.51 142.57 111.82 116.62 116.24 118.35 147.27 151.14 168.48 144.12 138.03 126.44 129.07 130.06 135.68 143.86 145.04 156.65 156.16

The cash conversion cycle of MKS Instruments Inc has shown some fluctuations over the years based on the provided data. The company's cash conversion cycle, which represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales, decreased from 156.16 days as of March 31, 2020, to 111.82 days as of March 31, 2024.

This indicates that the company has been able to manage its working capital more efficiently and speed up its cash conversion process over the period. However, there have been some periods where the cash conversion cycle increased, such as in September 2022 (168.48 days) and June 2022 (144.12 days), which may require further investigation to understand the factors contributing to these fluctuations.

Overall, the decreasing trend in the cash conversion cycle is a positive sign as it suggests that MKS Instruments Inc has improved its inventory management, accounts receivable collection, and accounts payable practices, leading to a more effective cash flow generation from its operations.