Flex Ltd (FLEX)

Liquidity ratios

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020
Current ratio 1.30 1.41 1.43 1.40 1.52 1.59 1.53 1.46 1.48 1.36 1.29 1.31 1.34 1.37 1.40 1.44 1.45 1.48 1.46 1.41
Quick ratio 0.61 0.70 0.72 0.63 0.67 0.74 0.72 0.66 0.70 0.60 0.57 0.60 0.64 0.67 0.73 0.82 0.88 0.90 0.89 0.81
Cash ratio 0.23 0.26 0.28 0.25 0.29 0.29 0.29 0.25 0.30 0.22 0.20 0.23 0.28 0.27 0.28 0.33 0.34 0.35 0.33 0.28

Flex Ltd's current ratio has shown fluctuations over the past few years, ranging between 1.29 and 1.59. The current ratio measures the company's ability to cover its short-term obligations with its current assets, and a ratio above 1 indicates that Flex Ltd has more current assets than current liabilities, which is generally considered a positive sign for liquidity.

In terms of the quick ratio, Flex Ltd's performance has been less stable, with values ranging from 0.57 to 0.90. The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets. A higher quick ratio indicates that Flex Ltd has a better ability to meet its short-term liabilities without relying on selling inventory, which is important for companies with slow-moving or obsolete inventory.

Furthermore, the cash ratio for Flex Ltd has also varied between 0.20 and 0.35. The cash ratio is the most conservative liquidity measure as it only considers the company's most liquid assets, such as cash and cash equivalents, relative to its current liabilities. A higher cash ratio suggests that Flex Ltd has a strong ability to meet its short-term obligations using only its cash reserves.

Overall, while the current ratio indicates that Flex Ltd generally has a comfortable level of liquidity to cover its short-term obligations, the fluctuations in the quick ratio and cash ratio suggest that the company may need to manage its liquidity more effectively to ensure consistent and strong financial health in the future.

Additional liquidity measure

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020
Cash conversion cycle days 50.74 60.97 62.13 62.39 67.36 72.91 72.18 73.68 74.95 70.72 69.82 65.92 59.46 55.15 45.15 42.07 42.17 41.09 38.75 37.93

The cash conversion cycle of Flex Ltd has exhibited some fluctuations over the periods analyzed. The company's cash conversion cycle represents the time it takes from when cash is paid out for inventory to when cash is collected from the sale of that inventory.

From June 30, 2020, to September 30, 2021, the cash conversion cycle increased steadily, reaching a peak of 45.15 days. This indicates that the company was taking longer to convert its investments in inventory into cash receipts from sales.

In the subsequent periods from December 31, 2021, to March 31, 2025, the cash conversion cycle showed some variability, with periods of decrease and increase. Notably, the cycle reached its lowest point of 50.74 days on March 31, 2025, suggesting an improvement in the efficiency of managing inventory and cash flows.

Overall, while there were fluctuations in the cash conversion cycle of Flex Ltd, the company demonstrated the ability to manage its working capital effectively over the periods analyzed, with a general trend towards reducing the time it takes to convert inventory into cash.