Onto Innovation Inc (ONTO)

Onto Innovation Inc's liquidity ratios show a positive trend over the years, indicating a strong ability to meet short-term obligations. The current ratio has consistently increased from 6.09 in 2020 to 8.69 in 2024, reflecting a healthy proportion of current assets to current liabilities.

Similarly, the quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also shown an improving trend from 4.35 in 2020 to 6.82 in 2024. This suggests that the company has a sufficient level of highly liquid assets to cover its short-term liabilities.

Furthermore, the cash ratio, which focuses solely on cash and cash equivalents as a percentage of current liabilities, has also increased steadily from 3.11 in 2020 to 5.01 in 2024. This indicates Onto Innovation Inc's enhanced ability to meet its current obligations with readily available cash resources.

Overall, the liquidity ratios of Onto Innovation Inc demonstrate a healthy financial position, with increasing levels of liquidity over the years, providing a strong foundation for meeting its short-term financial commitments effectively.

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Additional liquidity measure

The cash conversion cycle of Onto Innovation Inc has exhibited fluctuating trends over the past five years. In December 2020, the company had a cash conversion cycle of 296.16 days, which decreased to 192.50 days by December 2021, indicating an improvement in its efficiency in managing working capital. However, in December 2022, the cash conversion cycle increased significantly to 298.96 days, suggesting potential challenges in converting its inventory and receivables into cash.

By December 2023, the cash conversion cycle further extended to 357.75 days, reaching its highest point within the period analyzed. This prolonged cycle could imply that the company's cash flow might be tied up in its operations for an extended period before being realized as cash. Notably, in December 2024, the cash conversion cycle decreased to 292.33 days, showing some improvement compared to the previous year but still higher than the levels seen in 2021.

Overall, Onto Innovation Inc should closely monitor its working capital management to optimize its cash conversion cycle and ensure efficient utilization of resources to support its operational activities and growth prospects.