Impinj Inc (PI)

Impinj Inc's liquidity ratios have shown a trend of fluctuation over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been strong, with a peak of 9.07 in 2019 and a low of 6.21 in 2020. The current ratio improved significantly in 2023 to 8.73, indicating that the company has a higher level of current assets relative to its current liabilities. This suggests that Impinj Inc is in a good position to meet its short-term financial obligations.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also been relatively robust for Impinj Inc. The quick ratio has fluctuated between 4.75 and 7.19 over the past five years, with the ratio standing at 5.45 in 2023. This indicates that the company has a strong ability to meet its short-term obligations using its most liquid assets.

The cash ratio, which is the most conservative measure of liquidity as it considers only cash and cash equivalents, has also shown a positive trend for Impinj Inc. The cash ratio has ranged from 3.67 to 5.98 over the past five years, with a cash ratio of 3.67 in 2023. This suggests that the company holds a sufficient amount of cash to cover its immediate short-term liabilities.

Overall, Impinj Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, indicate that the company maintains a strong liquidity position and is well-equipped to meet its short-term financial obligations.

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Additional liquidity measure

The trend in Impinj Inc's cash conversion cycle over the past five years has been somewhat fluctuating. The cycle lengthened significantly in 2023 to 189.28 days compared to the prior year's 110.00 days. This indicates that the company's ability to convert its investments in inventory and receivables into cash has deteriorated.

In contrast, in 2021, the cash conversion cycle improved to 91.06 days, reflecting the company's efficiency in managing its working capital. However, this improvement was not sustained, as there was a notable increase in the cycle in 2022.

Overall, the current cash conversion cycle of 189.28 days suggests that Impinj Inc may be facing challenges in efficiently managing its working capital and converting its operational activities into cash. It is essential for the company to focus on optimizing its inventory turnover, accounts receivable collection, and accounts payable management to improve its cash conversion efficiency and overall financial health.