Photronics Inc (PLAB)
Liquidity ratios
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 5.07 | 4.24 | 3.33 | 3.13 | 3.50 |
| Quick ratio | 4.75 | 3.96 | 2.89 | 2.70 | 3.01 |
| Cash ratio | 3.49 | 2.77 | 1.85 | 1.57 | 1.95 |
Photronics Inc's liquidity ratios have shown a positive trend over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has consistently increased from 3.50 in 2020 to 5.07 in 2024. This indicates that the company has improved its ability to cover its short-term liabilities with its current assets.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. Similarly, the quick ratio has shown an upward trend over the years, increasing from 3.01 in 2020 to 4.75 in 2024. This suggests that Photronics Inc has strengthened its ability to meet short-term liabilities without relying on inventory.
The cash ratio, which evaluates the company's ability to cover its current liabilities with its cash and cash equivalents, has also seen a steady increase from 1.95 in 2020 to 3.49 in 2024. This indicates that Photronics Inc has enhanced its capacity to settle its immediate obligations solely with its cash reserves.
Overall, the improving liquidity ratios of Photronics Inc demonstrate its strengthened financial position and ability to meet its short-term obligations comfortably. This trend reflects positively on the company's financial management and liquidity management strategies.
Additional liquidity measure
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 84.94 | 70.78 | 68.52 | 90.32 | 78.10 |
The cash conversion cycle of Photronics Inc has fluctuated over the past five years. In 2024, the company's cash conversion cycle increased to 84.94 days from 70.78 days in 2023, indicating a slowdown in the conversion of company assets into cash. This suggests that Photronics Inc took longer to convert its investments in inventory and accounts receivable back into cash during that year.
Comparing to 2019 and 2021, in 2020, the company experienced a decrease in its cash conversion cycle to 78.10 days. However, in 2021, there was a notable increase to 90.32 days, signifying a period of more prolonged asset conversion. In 2022, the cash conversion cycle improved to 68.52 days, indicating a more efficient management of working capital and quicker cash turnover.
Overall, the trend in the cash conversion cycle of Photronics Inc shows some variability but indicates the need for the company to focus on managing its inventory and accounts receivable effectively to reduce the time it takes to convert assets into cash.