Corsair Gaming Inc (CRSR)

Corsair Gaming Inc's liquidity ratios provide insights into the company's ability to meet its short-term obligations.

1. Current Ratio:
The current ratio measures Corsair Gaming's ability to cover its short-term liabilities with its current assets. The trend shows some fluctuation over the years but generally remains above 1, indicating that the company has sufficient current assets to cover its current liabilities. The ratio has decreased slightly from 1.82 in 2022 to 1.70 in 2023, but it remains at a healthy level.

2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Corsair Gaming's quick ratio has shown some variability over the years but has generally been above 1, indicating that the company can meet its short-term obligations without relying on selling inventory. The quick ratio decreased from 1.25 in 2022 to 1.12 in 2023, reflecting a slight reduction in liquidity.

3. Cash Ratio:
The cash ratio measures Corsair Gaming's ability to cover its current liabilities with its cash and cash equivalents alone. The cash ratio has improved significantly from 2019 to 2023, indicating a stronger ability to meet short-term obligations using cash resources. While the ratio has fluctuated, the trend shows a positive increase in liquidity with a cash ratio of 0.51 in 2023.

Overall, Corsair Gaming Inc's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, indicate that the company has maintained a reasonable level of liquidity to support its short-term financial requirements. While there are minor fluctuations, the ratios generally suggest that Corsair Gaming is managing its liquidity effectively.

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Additional liquidity measure

The cash conversion cycle of Corsair Gaming Inc has shown variability over the years, indicating fluctuations in the company's ability to manage its working capital efficiently. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

In 2023, the cash conversion cycle decreased to 63.39 days, which suggests an improvement in the company's efficiency in managing its cash flows compared to the previous year. This reduction in the cycle could indicate better inventory management or faster collection of receivables.

However, in 2022 and 2021, the cash conversion cycle increased to 69.55 days and 72.17 days, respectively, reflecting a longer time taken by Corsair Gaming Inc to convert its investments into cash. This may signify potential challenges in managing inventory levels or delayed collection from customers during those periods.

In 2020, there was a significant decrease in the cash conversion cycle to 41.23 days, indicating a notable improvement in the company's working capital management efficiency compared to the prior years. This shorter cycle suggests a quicker conversion of investments into cash flows, which could have been driven by effective inventory planning and faster collection processes.

In 2019, the cash conversion cycle was 54.36 days, showing moderate efficiency in working capital management compared to subsequent years.

Overall, analyzing the trend of Corsair Gaming Inc's cash conversion cycle over the years provides insights into the company's operational effectiveness and financial health, highlighting the importance of efficiently managing working capital components to enhance liquidity and overall performance.