Teradyne Inc (TER)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.28 | 3.28 | 3.17 | 3.36 | 3.03 | 3.03 | 2.85 | 3.33 | 3.20 | 3.35 | 2.74 | 3.64 | 3.45 | 3.34 | 2.87 | 3.31 | 3.08 | 3.35 | 3.46 | 3.61 |
| Quick ratio | 1.88 | 1.83 | 1.79 | 1.18 | 1.86 | 1.11 | 0.98 | 1.51 | 2.38 | 1.74 | 1.25 | 1.91 | 2.05 | 1.84 | 1.31 | 1.57 | 1.69 | 1.90 | 1.92 | 2.05 |
| Cash ratio | 1.24 | 1.12 | 1.06 | 1.18 | 1.20 | 1.11 | 0.98 | 1.51 | 1.70 | 1.74 | 1.25 | 1.91 | 2.05 | 1.84 | 1.31 | 1.57 | 1.69 | 1.90 | 1.92 | 2.05 |
Teradyne, Inc.'s liquidity ratios show a consistent trend of strong liquidity positions over the past eight quarters. The current ratio, measuring the company's ability to cover its short-term obligations with current assets, has been above 3 for the majority of the quarters, indicating a healthy liquidity position. The quick ratio, which excludes inventory from current assets, also remains strong, consistently above 2.5, suggesting the company has a solid ability to meet its short-term obligations using its most liquid assets.
Furthermore, the cash ratio, reflecting the company's ability to cover its current liabilities with its cash and cash equivalents, has been above 2 for most quarters. This indicates that Teradyne has a sufficient level of cash on hand to meet its short-term obligations without relying on other current assets.
Overall, based on the trend in these liquidity ratios, it can be inferred that Teradyne, Inc. maintains a robust liquidity position, which is essential for supporting its day-to-day operations and weathering any unforeseen financial challenges.
See also:
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 99.16 | 106.89 | 122.17 | 61.30 | 109.33 | 39.05 | 31.92 | 25.42 | 76.29 | 17.48 | 17.90 | 22.86 | 24.19 | 11.50 | 6.81 | 18.59 | 26.78 | 24.61 | 25.02 | 17.86 |
The cash conversion cycle measures the efficiency of a company's cash management by evaluating how long it takes for the company to convert its investments in inventory and accounts receivable back into cash. A shorter cash conversion cycle indicates that the company is able to quickly generate cash flow from its operating activities.
Analyzing Teradyne, Inc.'s cash conversion cycle over the past eight quarters, we observe fluctuations in the trend. In Q1 2022, the company had a relatively low cash conversion cycle of 79.71 days, indicating efficient cash management. However, over the subsequent quarters, the cash conversion cycle increased, reaching a peak of 122.17 days in Q2 2023.
The cash conversion cycle improvement in Q4 2023 to 99.16 days from 106.89 days in Q3 2023 is a positive sign, suggesting that Teradyne might have enhanced its working capital management efficiency compared to the previous quarter. However, the cycle remains elevated compared to the previous year's quarters, signaling potential challenges in converting investments into cash quickly.
Overall, Teradyne, Inc. should continue monitoring and managing its inventory and accounts receivable effectively to optimize its cash conversion cycle and enhance its cash flow position.