PDF Solutions Inc (PDFS)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 3.40 | 3.89 | 3.32 | 4.30 | 4.58 |
| Quick ratio | 1.90 | 2.67 | 2.39 | 3.20 | 3.44 |
| Cash ratio | 1.90 | 2.67 | 2.39 | 3.20 | 3.44 |
The Current Ratio for PDF Solutions Inc has shown a gradual decline from 4.58 in December 2020 to 3.40 in December 2024. Although the ratio remains above 1, indicating the company's ability to cover its short-term obligations with its current assets, the downward trend suggests a potential decrease in liquidity over the years.
Similarly, the Quick Ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also experienced a decrease over the period, from 3.44 in December 2020 to 1.90 in December 2024. This decline indicates that the company may have difficulty meeting its short-term obligations without relying on selling inventory.
The Cash Ratio, representing the proportion of current liabilities that can be covered by cash alone, has followed a similar decreasing trend from 3.44 in December 2020 to 1.90 in December 2024. This indicates that the company's ability to settle its current obligations solely with cash has weakened over the years.
Overall, the decreasing trends in the Current Ratio, Quick Ratio, and Cash Ratio suggest a potential deterioration in PDF Solutions Inc's liquidity position, indicating the need for the company to closely monitor and manage its short-term assets and obligations to ensure financial stability in the future.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Based on the provided data, PDF Solutions Inc has consistently maintained a cash conversion cycle of 0.00 days over the five-year period from December 31, 2020, to December 31, 2024.
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash flows from sales. A shorter cash conversion cycle indicates that the company is efficient in managing its working capital, as it can quickly convert its inventory into cash.
In the case of PDF Solutions Inc, a cash conversion cycle of 0.00 days suggests that the company has been able to manage its inventory levels effectively and efficiently collect payments from customers almost instantaneously. This efficient management of working capital is favorable for the company, as it allows for smoother operations and potentially better financial performance.
Overall, PDF Solutions Inc's consistently low cash conversion cycle demonstrates strong working capital management, which can contribute to improved liquidity and financial stability in the long run.