Dell Technologies Inc (DELL)
Liquidity ratios
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.74 | 0.82 | 0.80 | 0.80 | 0.70 |
| Quick ratio | 0.25 | 0.52 | 0.49 | 0.52 | 0.51 |
| Cash ratio | 0.15 | 0.17 | 0.17 | 0.18 | 0.18 |
The liquidity ratios of Dell Technologies Inc, as depicted by the current ratio, quick ratio, and cash ratio, have fluctuated over the past five years.
The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown a decreasing trend from 0.70 in 2020 to 0.74 in 2024. A current ratio below 1 indicates that Dell may potentially have difficulty meeting its short-term obligations.
The quick ratio, a more stringent measure of liquidity than the current ratio, includes only the most liquid assets in the calculation. Dell's quick ratio has fluctuated over the years, ranging from 0.49 in 2022 to 0.52 in 2023 and 2021. This suggests that the company may have had some challenges in meeting its immediate liabilities with its most liquid assets.
The cash ratio, which is the most conservative liquidity ratio as it shows the proportion of a company's current liabilities that can be covered by cash and cash equivalents, has remained relatively stable over the past five years, hovering around 0.17 to 0.18. This implies that Dell has a consistent ability to cover its short-term obligations with its cash on hand.
In conclusion, Dell Technologies Inc's liquidity ratios have shown mixed performance, with the current and quick ratios indicating potential liquidity challenges, while the cash ratio demonstrates a stable ability to cover short-term liabilities with cash reserves. It would be advisable for the company to closely monitor its liquidity position and take measures to improve it if necessary.
See also:
Additional liquidity measure
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -66.02 | 1.36 | -32.38 | -24.11 | -20.67 |
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. Dell Technologies Inc has experienced fluctuating cash conversion cycles over the past five years, as illustrated in the data provided.
In the most recent fiscal year ending February 2, 2024, Dell Technologies Inc had a negative cash conversion cycle of -66.02 days. This indicates that the company is able to convert its investments into cash relatively quickly, possibly due to efficient inventory management and strong sales operations.
In contrast, the company had a significantly shorter cash conversion cycle of 1.36 days in the previous fiscal year, ending February 3, 2023. This suggests a very efficient cash cycle where Dell was able to quickly convert its resources into cash.
Looking further back, the company's cash conversion cycle was negative in the fiscal years ending January 28, 2022, and January 29, 2021, indicating a consistent trend of converting investments into cash rapidly.
Overall, Dell Technologies Inc has shown a historical pattern of effectively managing its cash conversion cycle, with negative values in recent years indicating a swift conversion of resources into cash flow. This efficient cycle suggests strong sales and inventory management practices within the company.