ON Semiconductor Corporation (ON)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	2,691,300	2,483,000	2,919,000	1,352,600	1,080,700
Short-term investments	US$ in thousands	300,000	0	22,000	—	—
Receivables	US$ in thousands	1,160,100	935,400	842,300	809,400	676,000
Total current liabilities	US$ in thousands	1,334,800	2,183,600	2,061,400	1,543,400	1,674,500
Quick ratio		3.11	1.57	1.84	1.40	1.05

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,691,300K + $300,000K + $1,160,100K) ÷ $1,334,800K
= 3.11

The quick ratio of ON Semiconductor Corporation has shown a steadily increasing trend over the years, starting at 1.05 in December 31, 2020, and reaching 3.11 in December 31, 2024. This indicates the company's ability to meet its short-term obligations using its most liquid assets, such as cash and equivalents, accounts receivable, and marketable securities.

An increasing quick ratio is generally a positive sign as it suggests improved liquidity and financial health. A quick ratio above 1 indicates that the company has an adequate level of liquid assets to cover its current liabilities. ON Semiconductor's quick ratio has exceeded this benchmark, which indicates a strong ability to meet its short-term financial obligations without relying heavily on inventory or other less liquid assets.

Overall, the increasing trend in ON Semiconductor's quick ratio over the years reflects a strengthening liquidity position, which is essential for weathering unexpected financial challenges and capitalizing on growth opportunities while maintaining financial stability.