The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Mellanox Technologies's current ratio for the quarter that ended in Mar. 2020 was 3.97.
Mellanox Technologies has a current ratio of 3.97. It indicates the company may not be efficiently using its current assets or its short-term financing facilities. This may also indicate problems in working capital management.
The historical rank and industry rank for Mellanox Technologies's Current Ratio or its related term are showing as below:
MLNX's Current Ratio is not ranked *
in the Semiconductors industry.
Industry Median: 2.425 * Ranked among companies with meaningful Current Ratio only.
Mellanox Technologies Current Ratio Historical Data
The historical data trend for Mellanox Technologies's Current Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Mellanox Technologies's Current Ratio
For the Semiconductors subindustry, Mellanox Technologies's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Mellanox Technologies's Current Ratio Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, Mellanox Technologies's Current Ratio distribution charts can be found below:
* The bar in red indicates where Mellanox Technologies's Current Ratio falls into.
Mellanox Technologies Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Mellanox Technologies's Current Ratio for the fiscal year that ended in Dec. 2019 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Mellanox Technologies (NAS:MLNX) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Mellanox Technologies Current Ratio Related Terms
Thank you for viewing the detailed overview of Mellanox Technologies's Current Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Mellanox Technologies (Mellanox Technologies) Business Description
Mellanox Technologies Ltd is engaged in the development, manufacturing, marketing and sales of end-to-end Ethernet and InfiniBand intelligent interconnect solutions and services for servers, storage, and hyper-converged infrastructure. The company offers integrated circuits, adapter cards, switch systems, cables, modules, software, services, and accessories. The company supplies its products mainly to the storage and communications infrastructure equipment vendors. The company operates its business mainly in United States, Europe, China, Japan, India, Taiwan and Australia.
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