Veeco Instruments Inc (VECO)
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 | 3.98 | 3.54 | 3.52 | 3.05 | 3.24 | 2.69 | 2.51 | 2.41 | 2.59 | 2.50 | 2.84 | 2.58 | 2.90 | 3.49 | 3.56 | 3.78 | 4.00 | 3.90 | 4.22 | 3.89 |
| Quick ratio | 1.79 | 1.49 | 1.50 | 1.27 | 1.40 | 1.07 | 1.01 | 0.95 | 1.17 | 1.04 | 1.15 | 1.05 | 1.18 | 1.79 | 1.84 | 2.00 | 2.18 | 2.10 | 2.36 | 1.88 |
| Cash ratio | 1.79 | 1.49 | 1.50 | 1.27 | 1.40 | 1.07 | 1.01 | 0.95 | 1.17 | 1.04 | 1.15 | 1.05 | 1.18 | 1.79 | 1.84 | 2.00 | 2.18 | 2.10 | 2.36 | 1.88 |
Veeco Instruments Inc's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, have shown some fluctuations over the past few years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been above 3, indicating a strong liquidity position. However, there has been a slight decrease in the current ratio from a high of 4.22 in June 2020 to 3.98 in December 2024.
The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. Veeco Instruments Inc's quick ratio has also displayed a decreasing trend, falling from 2.36 in June 2020 to 1.79 in December 2024. This indicates a declining ability to meet short-term obligations without relying on inventory conversion.
The cash ratio, which focuses solely on the company's ability to cover its short-term liabilities with cash and cash equivalents, has seen a similar downward trajectory, declining from 2.36 in June 2020 to 1.79 in December 2024. This suggests a decreasing level of immediate liquidity available to meet obligations.
Overall, while Veeco Instruments Inc has maintained a relatively healthy liquidity position with current ratios above 2, the declining trend in both the quick ratio and cash ratio indicates a potential need for the company to closely monitor and manage its liquidity in the future to ensure it can meet its short-term obligations effectively.
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 | 216.94 | 218.55 | 239.89 | 227.05 | 244.64 | 244.10 | 235.78 | 214.51 | 197.19 | 179.83 | 175.93 | 185.35 | 182.88 | 186.60 | 193.14 | 203.22 | 204.94 | 212.88 | 199.54 | 185.83 |
The cash conversion cycle (CCC) of Veeco Instruments Inc has shown fluctuations over the past few years. The CCC measures the time it takes for a company to convert its investments in raw materials and other inputs into cash flows from sales.
From March 31, 2020, to December 31, 2024, Veeco's CCC ranged from a high of 244.64 days to a low of 175.93 days. A decreasing CCC generally indicates an improvement in working capital management as the company is able to convert its inventory and receivables into cash more efficiently.
Veeco experienced a peak CCC in the first half of 2023, which suggests potential issues with managing inventory levels or collecting receivables. It is essential for the company to focus on optimizing its inventory turnover and speeding up the collection of receivables to shorten its CCC.
The gradual decrease in CCC from the high point in mid-2023 to the end of 2024 is a positive trend, indicating potential improvements in operational efficiency and working capital management. However, it would be beneficial for Veeco to continue monitoring and enhancing its cash conversion cycle to ensure optimal working capital utilization and cash flow generation.
Overall, Veeco's cash conversion cycle analysis highlights the importance of effective inventory management, accounts receivables collection, and accounts payables management in maximizing profitability and liquidity.