Skyworks Solutions Inc (SWKS)

Skyworks Solutions Inc's liquidity ratios have shown fluctuating trends over the past five years. The current ratio measures the company's ability to cover its short-term obligations with its current assets. From 2020 to 2024, the current ratio ranged from 2.63 to 5.54, indicating that the company had a notably high level of current assets relative to its current liabilities in 2024 compared to the previous years. This suggests that Skyworks Solutions Inc improved its short-term liquidity position in 2024.

Moving on to the quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, we see a similar pattern of fluctuations. The quick ratio ranged from 1.39 to 3.44 over the same period. In 2024, the quick ratio improved to 3.44, indicating that the company had a significant amount of highly liquid assets available to cover its short-term liabilities.

Next, the cash ratio, which is the strictest measure of liquidity as it considers only cash and cash equivalents, paints a more conservative picture. The cash ratio ranged from 0.49 to 2.59 from 2020 to 2024. In 2024, the cash ratio was 2.59, reflecting an increase in the company's ability to cover its current liabilities with its cash holdings.

Overall, the liquidity ratios of Skyworks Solutions Inc have shown an improvement in 2024 compared to the previous years. The company appears to have strengthened its liquidity position by increasing its current assets and cash reserves relative to its short-term liabilities, indicating a positive trend in managing its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle of Skyworks Solutions Inc has shown some fluctuations over the past five years. In 2024, the cash conversion cycle decreased to 135.51 days compared to 197.65 days in 2023, indicating an improvement in managing cash flow from operations, inventory turnover, and accounts receivable collection. This reduction suggests that the company is able to convert its investments in inventory and receivables into cash at a faster pace in the most recent year.

In 2022, the cash conversion cycle increased to 161.50 days from 129.93 days in 2021. This increase may indicate inefficiencies in managing working capital, including inventory levels and collection of receivables, which led to a longer period for the company to convert these assets into cash.

In 2020, the cash conversion cycle was at 141.72 days, slightly higher than in 2021 but lower compared to 2022. This indicates that the company was able to manage its cash flow and working capital more effectively in 2020 than in the subsequent years.

Overall, the trend in the cash conversion cycle of Skyworks Solutions Inc shows some variability, with improvements in certain years and deteriorations in others. It is important for the company to consistently monitor and optimize its cash conversion cycle to ensure efficient use of resources and improved financial performance.