Monolithic Power Systems Inc (MPWR)
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 | 5.31 | 6.42 | 6.77 | 6.34 | 7.74 | 6.94 | 6.51 | 5.14 | 5.36 | 4.55 | 5.23 | 4.58 | 4.96 | 4.68 | 5.20 | 4.91 | 5.73 | 5.18 | 5.47 | 6.27 |
| Quick ratio | 3.72 | 4.83 | 4.96 | 4.75 | 5.69 | 4.93 | 4.44 | 3.50 | 3.53 | 3.08 | 3.71 | 3.30 | 3.68 | 3.63 | 4.11 | 3.86 | 4.52 | 4.09 | 4.17 | 4.85 |
| Cash ratio | 2.93 | 4.34 | 4.43 | 4.12 | 4.72 | 4.17 | 3.75 | 2.91 | 2.80 | 2.53 | 3.19 | 2.84 | 3.19 | 3.26 | 3.67 | 3.40 | 4.05 | 3.48 | 3.75 | 4.35 |
Monolithic Power Systems Inc's liquidity ratios show a strong financial position over the analyzed periods. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has consistently remained above 4.5, indicating a healthy liquidity position. It peaked at 7.74 on December 31, 2023, reflecting a higher level of current assets compared to current liabilities.
The quick ratio, a more stringent measure of liquidity that excludes inventories from current assets, also demonstrates a robust liquidity position for Monolithic Power Systems Inc. The company has consistently maintained quick ratios above 3.0, with the ratio reaching its highest point of 5.69 on December 31, 2023. This suggests the company can cover its short-term obligations without relying on the sale of inventory.
When looking at the cash ratio, which provides the most conservative measure of liquidity by considering only cash and cash equivalents to current liabilities, Monolithic Power Systems Inc also exhibits a solid liquidity position. The cash ratio has generally remained above 2.5, with a peak of 4.72 on December 31, 2023, indicating the company holds sufficient cash to cover its short-term liabilities.
Overall, the liquidity ratios of Monolithic Power Systems Inc reveal a consistent and strong ability to meet its short-term obligations, suggesting a sound financial footing and the ability to weather potential financial uncertainties.
See also:
Monolithic Power Systems Inc Liquidity Ratios (Quarterly Data)
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 | 155.80 | 153.19 | 171.36 | 170.13 | 192.42 | 191.66 | 200.74 | 211.39 | 227.83 | 202.35 | 195.84 | 188.76 | 156.57 | 130.31 | 121.65 | 136.85 | 144.37 | 149.59 | 157.36 | 151.05 |
The cash conversion cycle of Monolithic Power Systems Inc has shown fluctuations over the period from March 31, 2020 to December 31, 2024. Initially, the company had a cash conversion cycle of around 151 days which decreased to 121.65 days by June 30, 2021, indicating an improvement in managing its working capital.
However, the trend reversed from the end of 2021 onwards, with the cash conversion cycle increasing steadily to 227.83 days by December 31, 2022. This prolonged cycle suggests that the company might be facing challenges in efficiently managing its cash flow, inventory, and receivables.
The cash conversion cycle declined slightly by the end of March 31, 2023 but remained above 190 days for the next few quarters. By December 31, 2024, the cycle had reduced to 155.80 days, yet it still remained elevated compared to earlier periods.
In conclusion, Monolithic Power Systems Inc needs to focus on optimizing its working capital management practices to shorten its cash conversion cycle, leading to improved liquidity and operational efficiency.