Qualcomm Incorporated (QCOM)

Qualcomm Incorporated's liquidity ratios show improvements over the years, indicating the company's ability to meet its short-term obligations.

The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has generally been on an upward trend from 2019 to 2023. With a current ratio of 2.33 in 2023, Qualcomm has $2.33 in current assets for every $1 in current liabilities. This indicates a strong liquidity position, reflecting an improvement in short-term solvency.

The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. Qualcomm's quick ratio has also shown a positive trend over the years, with a value of 1.38 in 2023. This suggests that Qualcomm has $1.38 in liquid assets for every $1 of current liabilities, indicating a healthy ability to meet short-term obligations without relying on inventory.

The cash ratio, which is the most stringent liquidity ratio, focuses solely on the company's ability to cover its current liabilities with cash and cash equivalents. Qualcomm's cash ratio has been relatively robust, with a value of 1.18 in 2023, signifying that the company holds $1.18 in cash for every $1 of current liabilities. This demonstrates Qualcomm's strong ability to meet its short-term obligations using its available cash resources.

Overall, Qualcomm's liquidity ratios paint a positive picture of the company's financial health, showing an improvement in liquidity and short-term solvency over the years. These ratios indicate that Qualcomm has sufficient liquid assets to cover its short-term liabilities, which is crucial for ensuring financial stability and operational flexibility.

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See also:

Qualcomm Incorporated Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of Qualcomm Incorporated has been fluctuating over the past five years. In September 2023, the cash conversion cycle increased significantly to 123.71 days compared to the previous year. This suggests that Qualcomm took longer to convert its investments in inventory and other resources into cash from sales during this period.

In September 2022, the cash conversion cycle was at 84.60 days, showing an increase from the previous year but still lower than 2023. In September 2021, the cash conversion cycle decreased to 36.43 days, indicating that Qualcomm was able to efficiently manage its working capital and generate cash from its operational activities within a shorter time frame.

The cash conversion cycle increased in September 2020 to 55.65 days compared to the previous year, which may suggest some inefficiencies in Qualcomm's working capital management during that period. However, in September 2019, the cash conversion cycle was at the lowest point over the five years at 17.30 days, indicating effective management of working capital and quick conversion of investments into cash from sales.

Overall, fluctuations in Qualcomm's cash conversion cycle over the years highlight the company's ability to efficiently manage its working capital and convert investments into cash, although there were periods of inefficiencies and challenges in working capital management.