NXP Semiconductors NV (NXPI)

The liquidity ratios of NXP Semiconductors NV have shown consistent levels of liquidity over the last five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has remained relatively stable, ranging from 1.82 to 2.14. This indicates that NXP has been able to meet its short-term obligations comfortably, with a 2022 peak of 2.13.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a consistent trend with values between 1.13 and 1.65. This ratio suggests that NXP has a sufficient level of highly liquid assets to cover its short-term liabilities without relying on inventory, highest in 2021 at 1.65.

The cash ratio, which provides an even stricter assessment of liquidity by considering only cash and cash equivalents in relation to current liabilities, has also demonstrated a stable performance over the years. The values have ranged from 0.76 to 1.28, indicating that NXP has had an adequate level of cash to meet its short-term obligations, with the highest value observed in 2022 at 1.28.

Overall, the liquidity ratios of NXP Semiconductors NV suggest that the company has maintained a healthy liquidity position, consistently being able to meet its short-term financial obligations over the past five years. It is essential for the company's financial stability and operational flexibility.

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See also:

NXP Semiconductors NV Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of NXP Semiconductors NV has fluctuated over the past five years. In 2023, the cash conversion cycle was 86.44 days, which was higher compared to the previous year, indicating that the company took longer to convert its investments in inventory back into cash. This increase could be a result of a slower collection of receivables or an increase in the time taken to sell inventory.

In 2022, the cash conversion cycle was 37.12 days, showing an improvement from the previous year's 25.85 days. This decrease suggests that NXP Semiconductors NV was able to manage its working capital more efficiently, reducing the time it took to convert its resources into cash.

Compared to 2020, where the cash conversion cycle was 35.68 days, the cycle was longer in 2021 at 25.85 days. This indicates that the company was more efficient in managing its working capital in 2021 compared to the previous year.

In 2019, the cash conversion cycle was 48.68 days, which was higher than in 2020 and 2021, reflecting that NXP Semiconductors NV took longer to convert its resources into cash that year.

Overall, the trend in the cash conversion cycle of NXP Semiconductors NV has shown fluctuations, with variations in efficiency in managing working capital over the past five years. Monitoring this cycle can provide insights into the company's liquidity management and operational efficiency.