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.


See also:

ON Semiconductor Corporation Quick Ratio