Texas Instruments Incorporated (TXN)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 4.12 | 4.31 | 4.62 | 4.91 | 4.55 | 5.69 | 5.72 | 5.17 | 4.70 | 4.92 | 5.09 | 5.54 | 5.33 | 5.63 | 5.08 | 6.12 | 4.28 | 4.24 | 3.92 | 3.49 |
| Quick ratio | 2.08 | 2.37 | 2.66 | 2.93 | 2.58 | 3.37 | 3.52 | 3.29 | 3.04 | 3.25 | 3.28 | 3.89 | 3.79 | 4.05 | 3.36 | 3.93 | 2.75 | 2.53 | 2.29 | 1.99 |
| Cash ratio | 2.08 | 2.37 | 2.66 | 2.93 | 2.58 | 3.37 | 3.52 | 3.29 | 3.04 | 3.25 | 3.28 | 3.89 | 3.79 | 4.05 | 3.36 | 3.93 | 2.75 | 2.53 | 2.29 | 1.99 |
Texas Instruments Incorporated has shown a consistent and strong current ratio over the reported periods, ranging from 3.49 to 6.12. This indicates the company's ability to cover its short-term liabilities with its current assets. The current ratio generally improved over the years, indicating a strengthening liquidity position.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also displayed a positive trend, ranging from 1.99 to 4.05. This suggests a healthy ability to meet short-term obligations without relying on selling inventory.
The cash ratio, which focuses solely on the most liquid current assets (cash and cash equivalents) to cover current liabilities, shows a similar trend to the quick ratio, ranging from 1.99 to 4.05. This indicates that Texas Instruments has a solid cash position to meet its immediate financial obligations.
Overall, the liquidity ratios of Texas Instruments demonstrate a consistently strong liquidity position, with the company having sufficient current assets to cover its short-term liabilities.
See also:
Texas Instruments Incorporated Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 252.38 | 241.24 | 229.16 | 227.53 | 224.56 | 221.60 | 214.55 | 190.19 | 160.83 | 142.54 | 133.26 | 126.60 | 116.81 | 114.94 | 117.02 | 126.74 | 137.44 | 150.80 | 156.68 | 142.60 |
The cash conversion cycle of Texas Instruments Incorporated has shown fluctuations over the periods provided. Starting at 142.60 days on March 31, 2020, the cycle increased to its peak at 252.38 days on December 31, 2024. This indicates a progressive deterioration in the company's ability to efficiently convert its investments in raw materials and other inputs into cash receipts from sales.
During the analysis period, there were instances of improvement in the cash conversion cycle, such as the decrease from 227.53 days on March 31, 2024, to 229.16 days on June 30, 2024. However, generally, there is a notable trend towards a longer cash conversion cycle, reflecting potential inefficiencies in inventory management, accounts receivable collection, and payable turnover.
The company's management should focus on streamlining operations to reduce the cash conversion cycle, as a longer cycle may tie up working capital and impact liquidity. Periodic monitoring and strategic adjustments in inventory levels, credit policies, and payment terms with suppliers and customers could help in optimizing the cash conversion cycle and enhancing overall financial performance.