Qorvo Inc (QRVO)

Qorvo Inc's liquidity ratios show a declining trend over the past five years. The current ratio, which indicates the company's ability to meet short-term obligations with its current assets, decreased from 3.14 in 2020 to 1.99 in 2024. This suggests that the company may have a slightly lower ability to cover its short-term liabilities with its current assets in the most recent year.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also decreased from 2.02 in 2020 to 1.18 in 2024. This indicates a potential decline in the company's ability to quickly cover its short-term liabilities with its most liquid assets.

Furthermore, the cash ratio, which specifically measures the company's ability to pay off its current liabilities with its cash and cash equivalents, decreased from 1.33 in 2020 to 0.84 in 2024. This suggests that Qorvo Inc may have a decreased capacity to settle its short-term obligations solely with its cash assets.

Overall, the decreasing trend in Qorvo Inc's liquidity ratios raises concerns about the company's short-term financial flexibility and ability to meet its immediate payment obligations in the most recent fiscal year. Further analysis and monitoring of the company's liquidity position may be necessary to understand the underlying factors contributing to these trends.

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Additional liquidity measure

The cash conversion cycle of Qorvo Inc has fluctuated over the past five years. In the most recent fiscal year ending on March 31, 2024, the company's cash conversion cycle was 114.60 days, representing a slight improvement compared to the previous year. However, when compared to two years ago, the cash conversion cycle has increased.

The cash conversion cycle of 114.60 days indicates that on average, it takes Qorvo Inc around 114.60 days to convert its investments in inventory into cash receipts from customers. This metric is important as it reflects the efficiency of the company in managing its working capital. A lower cash conversion cycle is generally favorable as it signifies that the company is able to quickly recover its cash invested in inventory and accounts receivable.

Overall, Qorvo Inc should continue to monitor and potentially improve its cash conversion cycle to ensure efficient operations and effective management of working capital in the future.