Ciena Corp (CIEN)

The liquidity ratios of Ciena Corp show a consistent trend over the past five years. The current ratio has remained relatively stable, ranging from 3.25 to 3.84, indicating that the company has consistently had more than enough current assets to cover its current liabilities. This suggests that Ciena Corp has a strong ability to meet its short-term obligations.

The quick ratio, which excludes inventory from current assets, also reflects a similar trend ranging from 2.01 to 2.76 over the period. This ratio provides a more conservative measure of liquidity and indicates that the company can cover its short-term liabilities with its most liquid assets.

The cash ratio, which is the most conservative measure of liquidity, has shown variations over the years but generally remained above 1.0, indicating that Ciena Corp has had sufficient cash on hand to cover its current liabilities.

Overall, the liquidity ratios of Ciena Corp demonstrate a healthy liquidity position, with ample resources to meet its short-term obligations. This indicates a strong financial position and ability to manage its day-to-day operations effectively.

---

Additional liquidity measure

The cash conversion cycle of Ciena Corp has varied over the past five years. In the latest fiscal year ending on Nov 2, 2024, the company's cash conversion cycle was 149.91 days, indicating an improvement compared to the previous year's figure of 193.00 days. However, the cycle was longer than in the two preceding years, where it was 170.79 days in Oct 29, 2022, and 94.55 days in Oct 30, 2021. The company had the shortest cash conversion cycle in the analysis period on Oct 31, 2020, with a cycle of 86.80 days.

A decreasing cash conversion cycle typically signifies that the company is managing its cash flows more efficiently, converting its inventory into cash more quickly, and collecting receivables faster. Conversely, an increasing cycle may indicate issues with inventory turnover, accounts receivable collection, or payment of accounts payable.

It is important for Ciena Corp to monitor its cash conversion cycle regularly and strive to optimize it further to enhance its liquidity position, improve working capital management, and facilitate sustainable growth in the future.