Impinj Inc (PI)

Impinj Inc's liquidity ratios show a consistently strong liquidity position over the years.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown an increasing trend from 6.21 in 2020 to 8.73 in 2023, before decreasing to 0.99 in 2024. Despite the significant drop in 2024, the current ratio remains above 1, indicating that Impinj Inc has more than enough current assets to cover its short-term liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. It has also exhibited a positive trend, increasing from 4.75 in 2020 to 5.45 in 2023 before dropping to 0.67 in 2024. Again, even though the quick ratio has declined in 2024, it remains above 1, suggesting that Impinj Inc can meet its short-term obligations without relying on selling inventory.

The cash ratio, the most conservative liquidity ratio, focuses solely on the company's ability to cover its current liabilities with cash and cash equivalents. The cash ratio for Impinj Inc has followed a similar pattern of increase and subsequent decline, rising from 3.84 in 2020 to 5.45 in 2021, before falling to 0.50 in 2024. While the cash ratio has dropped significantly in 2024, it still suggests that the company has a sufficient cash buffer to pay off its immediate obligations.

Overall, Impinj Inc's liquidity ratios demonstrate a strong liquidity position, with the company having ample assets to cover its short-term liabilities. However, the sudden drop in ratios in 2024 may raise concerns and warrant further investigation into the company's cash management and ability to meet its short-term obligations.

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Additional liquidity measure

The cash conversion cycle for Impinj Inc has shown fluctuations over the past five years. As of December 31, 2020, the company had a cash conversion cycle of 136.95 days, indicating that it took approximately 137 days to convert resources into cash. By December 31, 2021, the cycle improved to 91.06 days, suggesting a more efficient cash conversion process.

However, by December 31, 2022, the cash conversion cycle increased to 110.00 days, indicating a slight slowdown in the conversion of cash. Subsequently, as of December 31, 2023, the cycle extended significantly to 189.28 days, reflecting potential challenges in managing working capital and converting resources into cash.

As of the most recent data point on December 31, 2024, the cash conversion cycle stood at 165.86 days, which, although lower than the previous year, still indicates a need for the company to optimize its working capital management to enhance cash conversion efficiency. Overall, analyzing these fluctuations over five years can provide insights into the company's liquidity management and operational efficiency.