Universal Display (OLED)
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 | 7.18 | 7.18 | 6.31 | 9.70 | 7.72 | 6.69 | 10.88 | 8.27 | 6.63 | 7.07 | 6.01 | 5.38 | 4.93 | 5.85 | 6.11 | 5.77 | 5.61 | 4.85 | 5.10 | 5.95 |
| Quick ratio | 3.93 | 4.21 | 3.49 | 5.68 | 4.33 | 3.74 | 6.93 | 5.62 | 4.26 | 4.98 | 4.21 | 3.83 | 3.53 | 4.38 | 4.51 | 4.37 | 4.43 | 3.68 | 3.96 | 4.69 |
| Cash ratio | 3.93 | 4.21 | 3.49 | 5.68 | 4.33 | 3.74 | 6.93 | 5.62 | 4.26 | 4.98 | 4.21 | 3.83 | 3.53 | 4.38 | 4.51 | 4.37 | 4.43 | 3.68 | 3.96 | 4.69 |
Universal Display's liquidity position has been strong over the past few years based on the analysis of its liquidity ratios.
The current ratio, which measures the company's ability to cover its short-term obligations with its short-term assets, has been consistently above 5, with a peak of 10.88 on June 30, 2023. This indicates that Universal Display has ample current assets to meet its current liabilities.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Universal Display's quick ratio has shown a similar trend to the current ratio, remaining above 3 in most periods and reaching a high of 6.93 on June 30, 2023. This suggests that the company has a sufficient level of highly liquid assets to cover its short-term liabilities without relying on the sale of inventory.
The cash ratio, which is the most conservative liquidity ratio and focuses solely on cash and cash equivalents, has also been consistently strong for Universal Display, remaining above 3 in all periods examined. This indicates that the company has a solid amount of cash on hand to meet its immediate obligations.
Overall, Universal Display's liquidity ratios reflect a healthy financial position, with ample liquidity to support its short-term financial needs and weather potential economic uncertainties.
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 | 407.06 | 394.73 | 400.95 | 433.53 | 473.98 | 511.48 | 484.05 | 498.03 | 522.89 | 505.77 | 487.06 | 418.74 | 425.85 | 404.04 | 375.81 | 428.87 | 391.10 | 400.30 | 437.04 | 329.62 |
The cash conversion cycle measures how efficiently a company manages its working capital by analyzing the time it takes to convert its investments in inventory and accounts receivable back into cash.
Analyzing the data for Universal Display from March 2020 to December 2024, we observe fluctuations in the cash conversion cycle over time. The cycle ranged from a low of 329.62 days in March 2020 to a high of 522.89 days in December 2022. Generally, a shorter cash conversion cycle is favorable as it indicates that the company is able to generate cash quickly from its operational activities.
Universal Display's cash conversion cycle trended upward from 2020 to 2022, reaching its peak in December 2022. Subsequently, the cycle declined in 2023 and 2024, indicating improvements in the efficiency of the company's working capital management. The decrease in the cash conversion cycle suggests that Universal Display was able to optimize its inventory and receivables processes to generate cash more quickly.
It is important for Universal Display to continue monitoring and managing its cash conversion cycle effectively to ensure that working capital is deployed efficiently and cash flow is maximized. Analyzing the cash conversion cycle trend can provide valuable insights into the company's liquidity, operational efficiency, and overall financial health.