Vicor Corporation (VICR)

Vicor Corporation's liquidity ratios show a strong ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has remained consistently high over the years, indicating a healthy liquidity position. However, there has been a slight decrease from 9.52 in 2023 to 7.49 in 2024.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also demonstrates a solid liquidity position for Vicor Corporation. Although there has been some fluctuation, with a decrease from 6.68 in 2023 to 5.34 in 2024, the quick ratio remains at a level that indicates the company can promptly meet its short-term obligations without relying on inventory sales.

Furthermore, the cash ratio, which assesses the company's ability to cover its current liabilities with only its cash and cash equivalents, has shown a consistent and adequate level of liquidity for Vicor Corporation. The cash ratio has fluctuated between 2.95 and 5.48 over the years, indicating the company has a sufficient amount of cash on hand to settle its current obligations without needing to sell other assets.

Overall, Vicor Corporation's liquidity ratios reflect a strong financial position, with a high level of liquidity that enables the company to meet its short-term obligations comfortably. Despite some fluctuations in the ratios, they generally indicate a sound ability to manage its liquidity effectively.

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Additional liquidity measure

The cash conversion cycle of Vicor Corporation has shown an increasing trend over the years, indicating potential inefficiencies in managing its cash flow processes.

As of December 31, 2020, the cash conversion cycle stood at 94.14 days, which slightly increased to 95.12 days by December 31, 2021. However, a significant jump was observed by December 31, 2022, where the cash conversion cycle extended to 154.45 days. This trend continued into the following years, with the cycle reaching 167.03 days by December 31, 2023, and further escalating to 182.67 days by December 31, 2024.

The increasing cash conversion cycle suggests that Vicor Corporation is taking longer to convert its investments in inventory and other resources into cash inflows from sales. This delay can impact the company's liquidity and working capital management. It is essential for Vicor Corporation to analyze and streamline its operational processes to improve its cash conversion cycle and enhance overall financial efficiency.