ARM Holdings has a Cash Ratio of 1.94. It generally indicates that the company is able to cover all short-term debt and still have cash remaining.
The historical rank and industry rank for ARM Holdings's Cash Ratio or its related term are showing as below:
ARM'
s Cash Ratio Range Over the Past 10 Years
Min: 1.17 Med: 1.63 Max: 1.94
Current: 1.94
During the past 4 years, ARM Holdings's highest Cash Ratio was 1.94. The lowest was 1.17. And the median was 1.63.
ARM's Cash Ratio is ranked better than 69.16% of 989
companies
in the Semiconductors industry
Industry Median: 1.08
vs ARM: 1.94
ARM Holdings Cash Ratio Historical Data
The historical data trend for ARM Holdings's Cash 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 ARM Holdings's Cash Ratio
For the Semiconductors subindustry, ARM Holdings's Cash Ratio, along with its competitors' market caps and Cash 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.
ARM Holdings's Cash Ratio Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, ARM Holdings's Cash Ratio distribution charts can be found below:
* The bar in red indicates where ARM Holdings's Cash Ratio falls into.
ARM Holdings Cash Ratio Calculation
The Cash Ratio measures a company's ability to meet its short-term obligations with its cash and near-cash resources.
ARM Holdings's Cash Ratio for the fiscal year that ended in Mar. 2024 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.
ARM Holdings (NAS:ARM) Cash Ratio Explanation
The cash ratio is more conservative than other liquidity ratios, such as Quick Ratio and Current Ratio, because it only considers a company's most liquid resources. The numerator of cash ratio only considers Cash, Cash Equivalents and marketable securities. Other current assets, such as accounts receivable and inventories, are not included. The rationale is that these assets may require time to be transformed into cash, and the amount of money received is also uncertain.
The cash ratio shows a company’s ability to pay all current liabilities immediately without selling or liquidating other assets. Generally speaking, a higher cash ratio suggests the company has a stronger ability to cover its short-term debt. However, a high cash ratio could also indicate inefficient management: the company is inefficient in making full utilization of cash to invest protential profitable project. It may also suggest that the company is not confident about future profitability.
In general, the higher the cash ratio, the better the company's liquidity position.
ARM Holdings Cash Ratio Related Terms
Thank you for viewing the detailed overview of ARM Holdings's Cash Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Arm Holdings is the IP owner and developer of the ARM architecture (ARM stands for Acorn RISC Machine), which is used in 99% of the world's smartphone CPU cores, and it also has high market share in other battery-powered devices like wearables, tablets, or sensors. Arm licenses its architecture for a fee, offering different types of licenses depending on the flexibility the customer needs. Customers like Apple or Qualcomm buy architectural licenses, which allows them to modify the architecture and add or delete instructions to tailor the chips to their specific needs. Other clients directly buy off-the-shelf designs from Arm. Both off-the-shelf and architectural customers pay a royalty fee per chip shipped.
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