Texas Instruments Incorporated (TXN)
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 | 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 | 4.13 | 4.34 | 3.01 | 3.68 |
| Quick ratio | 3.12 | 4.12 | 4.24 | 3.93 | 3.67 | 3.98 | 4.13 | 4.60 | 4.45 | 4.74 | 4.08 | 4.86 | 3.34 | 3.16 | 2.84 | 2.54 | 3.04 | 3.19 | 2.13 | 2.56 |
| Cash ratio | 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 | 2.54 | 2.52 | 1.59 | 1.89 |
The liquidity ratios of Texas Instruments Inc. show a healthy financial position over the last eight quarters.
The current ratio, which measures short-term liquidity by comparing current assets to current liabilities, has consistently remained above 4, indicating that the company has more than enough current assets to cover its short-term obligations. The current ratio has shown minor fluctuations, with the highest ratio of 5.72 in Q2 2023 and the lowest of 4.55 in Q4 2023. Overall, the trend suggests that Texas Instruments has maintained strong liquidity throughout the period.
The quick ratio, a more stringent liquidity measure that excludes inventory from current assets, has also exhibited stability above 3. This indicates that even if inventory were excluded from current assets, the company would still have sufficient liquid assets to cover its current liabilities. The quick ratio ranged from a high of 4.35 in Q2 2023 to a low of 3.35 in Q4 2023, remaining consistently strong.
Lastly, the cash ratio, which provides an even more conservative measure of liquidity by considering only cash and cash equivalents, has shown a similar pattern of stability. The cash ratio has consistently been above 2, suggesting that Texas Instruments has maintained a solid cash position relative to its current liabilities. The ratio ranged from 3.63 in Q2 2023 to 2.81 in Q4 2023.
Overall, the liquidity ratios of Texas Instruments Inc. demonstrate a strong financial position with ample liquidity to meet its short-term obligations. These ratios suggest that the company is well-positioned to navigate potential financial challenges and capitalize on growth opportunities.
See also:
Texas Instruments Incorporated Liquidity Ratios (Quarterly Data)
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 | 195.16 | 209.10 | 199.38 | 170.26 | 145.72 | 133.17 | 130.91 | 121.76 | 115.74 | 112.47 | 114.66 | 126.21 | 143.95 | 219.55 | 195.55 | 165.01 | 139.74 | 137.43 | 137.38 | 134.44 |
The cash conversion cycle of Texas Instruments Inc. has shown fluctuations over the past eight quarters, ranging from 121.76 days to 220.99 days. The company's cash conversion cycle represents the time it takes for Texas Instruments to convert its investments in inventory and other resources into cash flows from sales.
In the most recent quarter, Q4 2023, the cash conversion cycle was 216.76 days, indicating a moderate increase compared to the previous quarter. This increase suggests that Texas Instruments may be taking longer to convert its investments into cash, which could impact its liquidity and working capital management.
It's worth noting that the cash conversion cycle has generally trended upwards over the past year, with Q4 2022 showing a cycle of 145.72 days compared to 216.76 days in Q4 2023. This trend indicates a potential slowdown in the efficiency of Texas Instruments' working capital management and could highlight areas for improvement in inventory management, accounts receivable collection, or payables management.
Overall, a longer cash conversion cycle may indicate inefficiencies in the company's operations or difficulties in managing its working capital effectively, potentially impacting its cash flow and overall financial health. Monitoring and managing the cash conversion cycle is crucial for Texas Instruments to ensure optimal liquidity and operational efficiency.