Avnet Inc (AVT)

Based on the data provided, we can analyze the liquidity ratios of Avnet Inc over the past five years.

1. Current Ratio:
The current ratio measures the company's ability to cover its short-term obligations with its current assets. Avnet Inc's current ratio has shown some fluctuations over the years, ranging from a low of 2.09 in 2022 to a high of 2.78 in 2020. The current ratio for the most recent year, 2024, stands at 2.32, indicating that the company has $2.32 in current assets for every $1 in current liabilities. Overall, the current ratio suggests that Avnet Inc has a healthy level of liquidity to meet its short-term obligations.

2. Quick Ratio:
The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets. Avnet Inc's quick ratio has also varied over the years, with a low of 1.05 in 2022 and a high of 1.80 in 2020. The quick ratio for 2024 is 1.05, indicating that the company has $1.05 in liquid assets (such as cash and accounts receivable) to cover each $1 of current liabilities. Although the quick ratio has remained relatively stable, it suggests that Avnet Inc may have a slightly lower level of immediate liquidity compared to its current assets.

3. Cash Ratio:
The cash ratio provides the most conservative measure of liquidity, focusing solely on cash and cash equivalents to cover current liabilities. Avnet Inc's cash ratio has fluctuated significantly over the years, with a low of 0.04 in 2022 and a high of 0.21 in 2020. The cash ratio for 2024 is 0.07, implying that the company has $0.07 in cash for every $1 of current liabilities. The decreasing trend in the cash ratio may indicate a potential increase in non-cash current assets relative to cash holdings.

In summary, Avnet Inc has maintained relatively strong liquidity positions over the past five years based on its current, quick, and cash ratios. The company's ability to meet its short-term obligations appears to be sufficient, although fluctuations in the ratios suggest some variability in its liquidity management. Further analysis of the composition of current assets and liabilities would provide a more in-depth understanding of Avnet Inc's liquidity position.

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Additional liquidity measure

The cash conversion cycle of Avnet Inc has shown fluctuations over the past five years. In 2024, the company's cash conversion cycle increased to 104.39 days from the previous year's 98.21 days. This indicates that, on average, it takes Avnet Inc 104.39 days to convert its investments in inventory into cash receipts from customers.

Comparing this figure with previous years, there was a noticeable increase from 2023 to 2024, suggesting potential challenges in managing inventory levels or collection periods. In 2022, the cash conversion cycle was 78.47 days, showing efficient management of working capital. In 2021 and 2020, the cash conversion cycle was 84.45 days and 98.10 days, respectively, indicating fluctuations in the company's ability to effectively manage its cash flows.

Overall, the trend in Avnet Inc's cash conversion cycle indicates the importance of continuous monitoring and improvement in managing inventory, receivables, and payables to optimize cash flow efficiency.