Qualcomm Inc. (NASDAQ:QCOM)

The financial ratios presented illustrate the liquidity position over multiple quarters. The current ratio demonstrates a general upward trend from the end of 2019 through to mid-2025, indicating an improvement in the company's ability to meet short-term liabilities with current assets. Starting at 1.76, it exhibits some fluctuations but ultimately rises to above 3.0 by the end of the latest period, which suggests enhanced liquidity management or growth in current assets relative to current liabilities.

The quick ratio, which excludes inventory from current assets, follows a similar pattern though with more pronounced variability. Beginning at 1.54, it declines through 2022 to a low of 0.90, suggesting a tightening in liquid assets relative to immediate liabilities during that timeframe. Afterward, there is a recovery trend, with the ratio climbing steadily, surpassing previous levels and reaching over 2.0 by the latest quarter. This indicates a strengthening position in liquid assets other than inventory to cover short-term obligations.

The cash ratio, a more conservative measure of liquidity accounting only for cash and cash equivalents, also shows volatility with an initial moderate decline from 1.24 to a low of 0.54 by late 2022. Following this trough, the cash ratio recovers gradually, reaching highs above 1.5 toward the most recent quarters, which points to an improved cash reserve relative to current liabilities.

Current Ratio

Overall positive trend with an increase from 1.76 to 3.19 from the starting to ending periods, indicating growing buffers in current assets.

Quick Ratio

More fluctuation observed, with a significant dip to 0.90 around 2022 but subsequent recovery to 2.02, showing variability in more liquid asset positions excluding inventories.

Cash Ratio

Lowest among the three ratios but follows a recovery pattern after 2022, rising from a low of 0.54 to 1.58, illustrating a cautious approach to cash reserves.

In summary, the liquidity ratios reveal that although there were periods of tightening between 2020 and 2022, the company progressively improved its liquidity stance afterward. The increasing trend in all three liquidity ratios in the most recent periods suggests enhanced financial flexibility and a stronger capability to cover short-term obligations, which is a positive indicator of financial health and risk management over the medium term.

The current assets of the company exhibit a generally upward trend over the observed periods, increasing from US$16,205 million in late 2019 to a peak near US$26,080 million around mid-2025, before slightly declining to approximately US$24,913 million by late 2025. Some fluctuations are apparent, with occasional decreases in certain quarters, but the overall trajectory is growth-oriented, indicating an expansion in liquid resources and short-term financial capacity.

Current liabilities show more volatility compared to current assets. Beginning at US$9,194 million in late 2019, the liabilities rose and fell across different quarters, with notable peaks around late 2021 and early 2022, reaching over US$13,400 million at one point. Later periods reflect a downward correction, with current liabilities decreasing to about US$7,800 million by late 2025. This variability suggests active management of short-term obligations, possibly reflecting operational or strategic adjustments.

The current ratio, a key liquidity indicator calculated as current assets divided by current liabilities, reflects these dynamics. Starting at 1.76 in late 2019, it experienced some oscillations but generally improved, crossing a 2.0 threshold around late 2020 and maintaining above this level in most subsequent periods. The ratio peaked at 3.19 by the end of 2025, signaling a strengthening short-term financial position and increased ability to meet current liabilities with current assets. Periods of decline in the ratio correspond with increases in current liabilities or dips in current assets, but the long-term trend is positive.

Current Assets

Demonstrated a robust upward trend with some quarterly fluctuations, growing by over 50% across the timeline.

Current Liabilities

Displayed higher variability, with peaks and troughs influenced by operational or financial activities; ended lower than some mid-period highs.

Current Ratio

Improved consistently over time, reflecting enhanced liquidity and financial stability, exceeding 3.0 in the latest quarter indicating strong coverage of liabilities by assets.

Quick Assets

The total quick assets demonstrate fluctuations over the analyzed quarters, initially declining from approximately 14.16 billion US dollars to a low point near 10.65 billion in mid-2022. Subsequently, there is a recovery trend, with values rising to reach around 17.85 billion by mid-2025 before declining slightly towards 15.74 billion at the end of the period. This pattern suggests periodic liquidity adjustments, with a notable dip in the middle of the timeline followed by a generally upward trend.

Current Liabilities

Current liabilities show variability throughout the quarters, beginning at approximately 9.19 billion US dollars. There is an initial increase reaching a peak near 13.43 billion by March 2022, followed by a downward trend toward 7.80 billion by mid-2025. This decline in liabilities towards the end of the observed period could indicate improved management of short-term obligations or repayment of current debts.

Quick Ratio

The quick ratio, which measures liquidity by comparing quick assets to current liabilities, varies across the quarters. Initially, the ratio decreases from 1.54 to 0.90 by mid-2022, signaling a potential decline in liquidity during this interval. After this low point, the quick ratio exhibits a consistent upward trend, reaching a peak of 2.02 by mid-2025. This indicates improving liquidity and a stronger ability to cover short-term liabilities without relying on inventory liquidation.

Overall Trends and Insights

Throughout the observed quarters, there are distinct phases of liquidity contraction and expansion. The period around mid-2022 shows a contraction phase, with a decline in quick assets accompanied by rising current liabilities, resulting in the lowest quick ratio. Following this phase, the company improves its liquidity position significantly, as reflected by increases in total quick assets and reductions in current liabilities, which enhance the quick ratio. The most recent quarters suggest a solid liquidity position with a quick ratio exceeding 2.0 at its highest point. This improving trend could be attributed to strategic financial management targeting a robust short-term financial position.

Total cash assets

The total cash assets show a fluctuating trend over the observed periods. Starting at 11,423 million USD, the amount experienced a decrease in early 2020, reaching a low point around mid-2022 at 6,382 million USD. Following this trough, cash assets generally increased, peaking at 14,305 million USD by late 2024 before slightly declining to approximately 12,334 million USD at the end of the data series. This indicates a recovery and subsequent volatility in cash holdings, with a notable dip in 2022.

Current liabilities

Current liabilities demonstrated variability across the same duration. Beginning at 9,194 million USD, liabilities rose to a peak of 13,432 million USD around early 2022. Subsequently, liabilities trended downward, ending at 7,800 million USD by mid-2025. The initial increase followed by a robust decrease suggests active management of short-term obligations, possibly through repayments or refinancing strategies.

Cash ratio

The cash ratio, representing liquidity with respect to current liabilities, exhibits a generally cyclical behavior. Initially above 1.0, it decreased below 1.0 during 2021 and early 2022, reaching as low as 0.54, indicating liquidity constraints in that period. From mid-2022 onwards, the ratio rose steadily, surpassing 1.5 by late 2024, reflecting improved liquidity and stronger cash coverage of short-term liabilities. This aligns with the observed trends in both rising cash assets and declining liabilities in the latter period.

Overall insights

The data reveal a period of liquidity tightening around 2021-2022, with reduced cash reserves and increased liabilities leading to cash ratios below the threshold of 1. This suggests short-term liquidity pressures during that interval. However, from mid-2022 forward, there is a clear recovery in liquidity position evidenced by growing cash assets coupled with decreasing current liabilities, resulting in a healthier cash ratio well above 1. These movements may reflect responsive financial management addressing earlier constraints, improving the company's ability to meet short-term obligations through increased cash availability.