Applied Materials Inc. (NASDAQ:AMAT)

Current Ratio

The current ratio exhibited an overall upward trend from early 2020 through early 2021, rising from 2.36 to a peak of 3.17 by January 31, 2021. Subsequently, a gradual decline was observed throughout 2022, reaching its lowest point at 2.16 in October 2022. Since then, the ratio has fluctuated moderately, with a recovery phase evident in early 2024, peaking again close to 2.86 in July 2024, before experiencing a slight decrease toward the end of the observed period. The data indicates a generally strong liquidity position with some variability, reflecting changing short-term asset and liability management.

Quick Ratio

The quick ratio followed a similar pattern to the current ratio, starting at 1.45 in January 2020 and increasing steadily to 2.15 by January 31, 2021. After this peak, it underwent a decline over 2022, bottoming out at 1.17 in October 2022. In 2023 and 2024, the quick ratio showed signs of recovery, gradually increasing to a high of 1.95 in October 2024, before dipping slightly by the end of the recorded timeframe. This trend indicates fluctuations in the company's short-term liquidity excluding inventory, with improvements in liquid assets relative to current liabilities observed during the recovery periods.

Cash Ratio

The cash ratio demonstrated notable volatility over the entire period. It rose from 0.87 in January 2020 to a peak of 1.47 at the beginning of 2021, indicative of a strong cash and cash equivalents position early in the timeframe. However, a sharp decline followed throughout 2022, with the ratio decreasing significantly to 0.35 by October 2022, the lowest in the dataset. Beginning in 2023, the cash ratio recovered steadily, reaching 1.26 in October 2024, before a minor drop occurred towards the end of 2024. This pattern reflects significant variability in cash reserves relative to current liabilities, potentially due to strategic cash management or operational cash flow shifts.

Current Assets

The current assets exhibited a general upward trend from January 2020 to July 2025. Starting from approximately $10.8 billion in early 2020, the value increased steadily with minor fluctuations, reaching over $20.6 billion by mid-2024. Towards the end of the period assessed, current assets slightly declined but remained above $19.7 billion, indicating sustained liquidity levels over the timeline.

Current Liabilities

Current liabilities showed a progressive increase from around $4.6 billion in early 2020 to a peak of about $8.5 billion in late 2024. However, there were fluctuations, including a significant rise in late 2021, followed by periods of moderate decline. By mid-2025, liabilities exhibited a slight reduction, settling just below $7.9 billion. These changes suggest fluctuations in short-term obligations, with a general trend of increasing liabilities over five years.

Current Ratio

The current ratio demonstrated variability across the quarters, starting at a level of 2.36 in early 2020, peaking near 3.17 in early 2021, which indicates strong short-term financial health during that time. After this peak, it gradually declined to around 2.16 by late 2022. The ratio subsequently increased again to approximately 2.8 in mid-2024 before experiencing a decline to around 2.5 by mid-2025. The current ratio consistently remained above 2, indicating the company's ability to cover its current liabilities with its current assets throughout the period, although with variable liquidity strength.

Overall Analysis

Over the analyzed timeframe, the company maintained a solid liquidity position as evidenced by the current ratio consistently exceeding 2. The growing trend in current assets was somewhat offset by increased current liabilities, leading to fluctuations in the ratio and indicating dynamic working capital management. The peak in current ratio around early 2021 suggests a period of enhanced liquidity, whereas the subsequent decreases reflect either rising liabilities or relatively slower asset growth. The data suggest careful monitoring of liabilities and efforts to sustain liquidity despite varying market or operational conditions.

The analysis of the quarterly financial data reveals several notable trends in liquidity and short-term financial health over the observed periods.

Total Quick Assets

The total quick assets displayed an overall upward trend from January 2020 through October 2024, beginning at 6,639 million US dollars and reaching a peak of 14,705 million US dollars in April 2024. After this peak, a slight decline is observed in subsequent quarters, with values falling to approximately 12,786 million US dollars by July 2025. This suggests an increase in the liquid assets available for immediate use over the long term, although with some reduction towards the end of the period.

Current Liabilities

Current liabilities exhibited a general increasing trend from 4,569 million US dollars in January 2020 to a high of 8,468 million US dollars in October 2024. There were fluctuations within the period: for example, after reaching 6,344 million US dollars in October 2021, liabilities surged to 7,379–8,468 million US dollars between late 2022 and late 2024. However, a decline followed in the final three reported quarters, ending at 7,883 million US dollars in July 2025. This increase in liabilities may reflect growing short-term obligations, which warrants monitoring relative to asset growth.

Quick Ratio

The quick ratio started strong at 1.45 in January 2020 and improved substantially to a maximum of 2.15 in January 2021. It then experienced a gradual decline, falling to a low of 1.17 in October 2022, indicating a reduction in the coverage of current liabilities by liquid assets during this period. Following this decline, the ratio trended upward again, reaching 1.95 by October 2024 before decreasing moderately in subsequent quarters to approximately 1.62 by July 2025. Despite fluctuations, the quick ratio remained above 1.0 throughout the analyzed periods, suggesting that liquid assets generally exceeded current liabilities across all quarters.

Overall, the data indicate growth in liquid assets concurrent with rising current liabilities, which affects the quick ratio dynamics. The initial improvement in liquidity during early 2021 was followed by a tapering phase, yet the company maintained a healthy quick ratio above 1.0, signifying sufficient liquidity to cover immediate obligations. The slight decline in quick assets and quick ratio toward the end of the period suggests increased attention may be needed to maintain liquidity levels amid rising liabilities.

Total Cash Assets

The total cash assets exhibited notable fluctuations over the observed periods. Initially, there was a substantial increase from 3,960 million US dollars to a peak of 6,765 million US dollars within the early quarters of 2020 and 2021. This was followed by a decline reaching a low point around the second and third quarters of 2022, with values dropping to approximately 2,581 to 3,548 million US dollars. Subsequently, the cash assets recovered steadily, climbing consistently through 2023 and into 2024, culminating in a notable peak of 9,471 million US dollars in early 2024. The latter part of the timeline shows a mild decrease but maintains elevated cash levels in comparison to the earlier periods.

Current Liabilities

Current liabilities generally trended upward throughout the timeframe. Starting at 4,569 million US dollars in early 2020, liabilities increased gradually, with notable rises in late 2021 and early 2022, reaching peaks above 7,300 million US dollars. Although some volatility is present, the liabilities mostly stayed elevated through 2023 and 2024, peaking around 8,468 million US dollars in late 2024. Towards the end of the period, a slight drop is observable, but liabilities remain high, close to the earlier peaks.

Cash Ratio

The cash ratio showed significant volatility over the analyzed quarters. It started below 1.0 in early 2020 but increased steadily to reach a high point of 1.47 by early 2021, reflecting a strong liquidity position relative to current liabilities. This was followed by a sharp decline, reaching a low near 0.35 in late 2022, indicating reduced immediate liquidity. From this low, liquidity improved consistently through 2023 and 2024, surpassing 1.0 on several occasions and peaking at approximately 1.26 in late 2024. Toward the final quarters, the ratio slightly declined but remained near 0.9, which still represents a reasonable liquidity buffer.

Overall Insights

The data reflects a period of significant liquidity fluctuation, with cash assets and liquidity ratios peaking in early 2021, declining sharply in 2022, then recovering and strengthening through 2023 and into 2024. This pattern suggests responses to varying operational or market conditions impacting cash management and obligations. Despite increases in current liabilities over time, the company managed to restore and maintain adequate liquidity levels by the end of the period, as indicated by the cash ratio rising above 1.0 and total cash assets' strong recovery. The observed trends imply effective cash flow management amid fluctuating liabilities and potentially changing business needs or external factors.