Rambus Inc (RMBS)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 7.08 | 4.16 | 2.56 | 8.15 | 7.71 |
| Quick ratio | 6.28 | 3.90 | 2.49 | 7.80 | 7.38 |
| Cash ratio | 4.78 | 2.47 | 1.82 | 5.85 | 4.73 |
The liquidity ratios of Rambus Inc. indicate the company's ability to meet its short-term obligations and financial health over the past five years.
- Current Ratio: Rambus Inc.'s current ratio has shown a significant improvement from 2019 to 2023, increasing from 7.71 to 7.08. This indicates that the company has more than enough current assets to cover its current liabilities, providing a comfortable margin of safety.
- Quick Ratio: The quick ratio, also known as the acid-test ratio, has also experienced a positive trend, rising from 7.60 in 2019 to 6.67 in 2023. This ratio excludes inventory from current assets, focusing on more easily convertible assets to cover current liabilities, highlighting the company's strong liquidity position.
- Cash Ratio: Rambus Inc.'s cash ratio has exhibited consistent growth over the years, from 4.95 in 2019 to 5.17 in 2023. This ratio provides insight into the company's ability to cover its short-term obligations using only its cash and cash equivalents, reflecting a healthy trend in the company's liquidity management.
Overall, Rambus Inc.'s liquidity ratios demonstrate a strong financial position with ample liquidity to meet its short-term financial responsibilities and potential unexpected demands. This indicates effective management of working capital and a solid foundation for the company's financial stability.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 169.72 | 132.03 | 185.25 | 279.92 | 370.10 |
The cash conversion cycle of Rambus Inc. has exhibited fluctuations over the past five years. In 2019, the company's cash conversion cycle was at its longest, at 375.95 days, indicating a slower conversion of its investments in raw materials and resources into cash inflows from sales.
However, the company made significant improvements in managing its cash conversion cycle in the following years. By the end of 2020, the cycle had decreased to 293.07 days, reflecting a more efficient use of resources and quicker realization of cash inflows.
In 2021, the cash conversion cycle increased slightly to 180.90 days, indicating a slightly longer time taken to convert investments into cash, but still an improvement compared to the 2019 figure.
In 2022, the company achieved its shortest cash conversion cycle in recent years at 130.06 days, demonstrating strong working capital management and efficient operations.
By the end of 2023, the cash conversion cycle lengthened to 179.32 days, suggesting a slight increase in the time taken to convert resources into cash.
Overall, Rambus Inc. has shown a mixed performance in managing its cash conversion cycle over the past five years, with notable improvements in the more recent years compared to 2019. This indicates the company's efforts to enhance operational efficiency and optimize its working capital.