Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Texas Instruments Inc., liquidity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The liquidity position of the company demonstrates a consistent decline across the observed period. All three liquidity ratios – current, quick, and cash – exhibit downward trends from 2021 to 2025, although the rate of decline varies between the ratios.
- Current Ratio
- The current ratio decreased from 5.33 in 2021 to 4.35 in 2025. While remaining above 4.0 throughout the period, the reduction indicates a diminishing ability to cover short-term liabilities with short-term assets. The most significant decrease occurred between 2022 and 2023, followed by a smaller decrease between 2023 and 2024, and a slight recovery in 2025.
- Quick Ratio
- The quick ratio experienced a more pronounced decline, falling from 4.45 in 2021 to 2.17 in 2025. This suggests a weakening ability to meet short-term obligations with the most liquid assets, excluding inventory. The rate of decline accelerated from 2022 onwards, indicating a growing reliance on inventory to cover current liabilities.
- Cash Ratio
- The cash ratio shows the steepest decline of the three, decreasing from 3.79 in 2021 to 1.55 in 2025. This indicates a substantial reduction in the company’s capacity to cover immediate liabilities with only cash and cash equivalents. The consistent downward trend suggests a strategic shift in asset allocation or increased investment of cash resources.
Collectively, these ratios suggest a decreasing cushion of liquid assets relative to short-term liabilities. While the company maintains liquidity throughout the period, the observed trends warrant further investigation into the underlying drivers of these changes, such as shifts in working capital management, investment strategies, or changes in short-term debt obligations.
Current Ratio
Texas Instruments Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Current Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Current Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The current ratio exhibited a declining trend over the five-year period, although a slight recovery is noted in the most recent year. Initial values indicate a strong liquidity position, which gradually diminished before stabilizing.
- Current Ratio Trend
- The current ratio began at 5.33 in 2021. A decrease was observed in 2022 to 4.70, continuing downward to 4.55 in 2023 and further to 4.12 in 2024. This represents a consistent erosion of the company’s ability to cover short-term liabilities with short-term assets. However, the ratio increased to 4.35 in 2025, suggesting a potential stabilization or modest improvement in liquidity.
The decrease in the current ratio appears to be driven by a combination of factors. While current assets generally increased from 2021 to 2023, the growth in current liabilities outpaced that of current assets. The slight decrease in current assets in 2024, coupled with continued growth in current liabilities, contributed to the lowest ratio value during the period. The 2025 figures show a decrease in current assets and current liabilities, with the latter decreasing at a slower rate, resulting in a slight increase in the current ratio.
- Asset and Liability Dynamics
- Current assets increased from US$13,685 million in 2021 to US$15,122 million in 2023, before decreasing to US$13,750 million in 2025. Current liabilities consistently increased from US$2,569 million in 2021 to US$3,643 million in 2024, then decreased to US$3,159 million in 2025. The relative growth of liabilities compared to assets is a key driver of the observed trend in the current ratio.
Despite the declining trend, the current ratio remained above 4.0 throughout the period, indicating that the company generally maintained a sufficient cushion of current assets to cover its current liabilities. However, the decreasing trend warrants monitoring to ensure continued short-term financial health.
Quick Ratio
Texas Instruments Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Accounts receivable, net of allowances | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Quick Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Quick Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The quick ratio demonstrates a consistent decline over the five-year period. While remaining above 2.0 throughout, the ratio exhibits a notable downward trajectory, suggesting a weakening in the company’s ability to meet its short-term obligations with its most liquid assets.
- Quick Ratio Trend
- The quick ratio began at 4.45 in 2021 and decreased to 2.17 by 2025. This represents a substantial reduction in the company’s capacity to cover current liabilities with readily convertible assets.
- Total Quick Assets
- Total quick assets decreased from US$11,440 million in 2021 to US$6,844 million in 2025. The rate of decline appears to accelerate in the later years of the period, with the largest decrease occurring between 2023 and 2024 (US$1,063 million) and again between 2024 and 2025 (US$2,455 million).
- Current Liabilities
- Current liabilities generally increased from US$2,569 million in 2021 to US$3,643 million in 2024, before decreasing to US$3,159 million in 2025. The increase in current liabilities between 2021 and 2024 contributed to the declining quick ratio, although the decrease in 2025 partially offset this effect.
The combined effect of decreasing quick assets and fluctuating current liabilities resulted in the observed decline in the quick ratio. While the ratio remains at a level generally considered acceptable, the trend warrants further investigation to understand the underlying drivers and potential implications for short-term financial health.
Cash Ratio
Texas Instruments Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Cash Ratio, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Cash Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The cash ratio exhibited a consistent decline over the five-year period from December 31, 2021, to December 31, 2025. This indicates a decreasing ability to cover immediate current liabilities with only cash and cash equivalents. Simultaneously, total cash assets and current liabilities both experienced fluctuations during the observed timeframe, contributing to the changing cash ratio.
- Total Cash Assets
- Total cash assets decreased steadily from US$9,739 million in 2021 to US$4,881 million in 2025. The largest year-over-year decrease occurred between 2023 and 2024, with a reduction of US$995 million. While there were decreases each year, the rate of decline appeared to accelerate in the later years of the period.
- Current Liabilities
- Current liabilities generally increased from US$2,569 million in 2021 to US$3,643 million in 2024, before decreasing to US$3,159 million in 2025. The increase between 2021 and 2024 suggests a growing level of short-term obligations. The decrease in 2025 may indicate a reduction in these immediate obligations.
- Cash Ratio Trend
- The cash ratio began at 3.79 in 2021, signifying a strong capacity to meet short-term obligations with available cash. However, the ratio progressively declined each year, reaching 3.04 in 2022, 2.58 in 2023, 2.08 in 2024, and finally 1.55 in 2025. This downward trend suggests a weakening short-term liquidity position, despite the company still possessing more cash than immediate liabilities throughout the period. The rate of decline in the cash ratio accelerated from 2023 onwards, coinciding with the larger decrease in total cash assets.
The combined effect of decreasing cash assets and fluctuating current liabilities resulted in a notable reduction in the cash ratio. While the ratio remained above 1.0 throughout the period, indicating that cash assets exceeded current liabilities, the decreasing trend warrants monitoring to assess potential future liquidity challenges.