Fabrinet (FN)

Liquidity ratios

Jun 30, 2025 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
Current ratio 3.00 3.32 3.32 3.66 3.61 3.52 3.71 3.72 3.43 3.07 3.00 2.95 2.83 2.92 2.88 2.90 3.04 3.43 3.17 3.32
Quick ratio 2.09 2.38 2.43 2.73 2.60 2.53 2.72 2.65 2.25 1.98 1.93 1.85 1.73 1.94 1.84 1.85 2.02 2.35 2.13 2.31
Cash ratio 1.15 1.41 1.41 1.58 1.54 1.46 1.52 1.47 1.14 0.97 0.96 0.95 0.89 1.02 1.04 1.10 1.23 1.39 1.22 1.40

The analysis of Fabrinet's liquidity ratios over the specified period demonstrates a generally stable liquidity profile with some moderate fluctuations. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, shows a relatively high and stable trend. Starting from 3.32 as of September 30, 2020, it exhibits minor declines and increases, reaching 2.88 by December 31, 2021, before trending upward to a peak of 3.72 as of September 30, 2023. By June 30, 2025, the current ratio is projected to be approximately 3.00. This indicates a solid liquidity position, with the company maintaining sufficient short-term assets relative to its liabilities.

The quick ratio, which excludes inventory from current assets to assess more liquid assets' coverage of current liabilities, follows a similar but slightly more variable trajectory. It begins at 2.31 in September 2020, decreasing to around 1.84 by December 2021, then gradually increasing to 2.65 as of September 2023. The ratio improves further to over 2.70 in late 2023 and early 2024 before slightly declining again to approximately 2.09 by June 2025. The consistent above-1.8 levels suggest that Fabrinet maintains sufficient liquid assets to cover immediate liabilities without relying on inventory.

The cash ratio, representing the most conservative measure of liquidity, underscores a strong cash position relative to current liabilities. It starts at 1.40 in September 2020, dipping below 1.00 in June 2022 but subsequently increasing to peak at approximately 1.58 in September 2024. Although it shows some variability, the cash ratio remains comfortably above 1.0 in most periods, indicating that Fabrinet holds enough cash and cash equivalents to cover its current liabilities entirely without needing to liquidate other assets.

Overall, Fabrinet's liquidity ratios demonstrate a stable and robust liquidity position, characterized by consistently high current and quick ratios, along with a strong cash ratio. These ratios reflect effective management of working capital, with ample liquidity to meet short-term obligations across the evaluated timeline.


Additional liquidity measure

Jun 30, 2025 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
Cash conversion cycle days 74.16 74.93 74.18 82.32 78.09 80.26 84.33 85.95 95.26 98.68 95.19 94.10 94.66 86.34 87.70 85.21 84.31 90.14 94.88 84.24

The analysis of Fabrinet's cash conversion cycle (CCC) over the period from September 2020 through June 2025 reveals evolving operational efficiency and liquidity management practices. Initially, the CCC fluctuated, peaking around the end of December 2022 at approximately 95.19 days, indicative of a longer process to convert investments in inventory and receivables into cash. This period also coincides with a relatively extended inventory and receivables turnover cycle, suggesting potential delays in inventory turnover or collections.

From the latter half of 2023 onward, the CCC demonstrates a consistent downward trend. By September 2024, the cycle reduced to approximately 74.18 days, signifying improvements in inventory management, receivables collection, or both. This reduction reflects increased operational efficiency and potentially an improved cash flow profile.

In the most recent period analyzed, June 2025, the CCC is approximately 74.16 days, illustrating relative stability at a lower level compared to previous years. The decline from nearly 95 days to around 74 days over this period indicates significant enhancements in the company's working capital management strategies.

Overall, the trend suggests that Fabrinet has achieved a more streamlined operating cycle in recent years. The reduction in the cash conversion cycle enhances liquidity and reduces the cash tied up in working capital, which could positively influence profitability and financial flexibility. These improvements are likely a result of more effective inventory control, faster receivables collection, or both, contributing to a more efficient operating cycle.