ON Semiconductor Corporation (ON)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	2,483,000	2,919,000	1,352,600	1,080,700	894,200
Short-term investments	US$ in thousands	—	22,000	—	—	—
Receivables	US$ in thousands	935,400	842,300	809,400	676,000	705,000
Total current liabilities	US$ in thousands	2,183,600	2,061,400	1,543,400	1,674,500	1,818,400
Quick ratio		1.57	1.84	1.40	1.05	0.88

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,483,000K + $—K + $935,400K) ÷ $2,183,600K
= 1.57

The quick ratio of ON Semiconductor Corp. has shown an improving trend over the past five years, indicating an increasing ability to cover its short-term obligations with its most liquid assets. The quick ratio has consistently exceeded 1.0, which is considered a favorable level, demonstrating the company's ability to meet its short-term liabilities without relying heavily on inventory.

In particular, the quick ratio increased from 0.98 in 2019 to 1.74 in 2023, reflecting significant progress in the company's liquidity position. This improvement suggests that ON Semiconductor Corp. has become more efficient in managing its current liabilities, potentially reducing the risk of liquidity problems.

Furthermore, the quick ratio exceeding 1.0 in each year implies that the company has sufficient liquid assets, such as cash and receivables, to cover its short-term liabilities. This indicates a healthy financial position and a lower probability of defaulting on its immediate payment obligations.

Overall, the trend of increasing quick ratios for ON Semiconductor Corp. signifies enhanced liquidity and financial stability, which may instill confidence in investors, creditors, and other stakeholders regarding the company's ability to meet its short-term financial commitments.