Lumentum Holdings Inc (LITE)
Liquidity ratios
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 5.90 | 5.20 | 3.13 | 4.53 | 4.38 | 3.20 | 3.06 | 3.04 | 4.38 | 4.69 | 3.87 | 3.96 | 3.67 | 3.81 | 3.50 | 7.38 | 7.24 | 6.85 | 6.19 | 4.49 |
| Quick ratio | 3.32 | 2.76 | 1.87 | 3.29 | 3.19 | 2.17 | 2.07 | 2.02 | 3.56 | 3.88 | 3.08 | 3.08 | 2.93 | 3.05 | 2.63 | 5.49 | 5.49 | 5.06 | 4.32 | 2.62 |
| Cash ratio | 3.29 | 2.74 | 1.86 | 3.27 | 3.18 | 2.17 | 2.06 | 2.02 | 3.56 | 3.88 | 3.08 | 3.08 | 2.93 | 3.05 | 2.63 | 5.49 | 5.49 | 5.06 | 4.32 | 2.62 |
The liquidity ratios of Lumentum Holdings Inc have shown fluctuations over the past few quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 3, indicating a strong liquidity position. However, there have been some fluctuations, with the ratio ranging from 3.04 to 5.90.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also exhibited fluctuations but has generally stayed above 2, indicating a healthy ability to meet short-term obligations without relying on inventory. The ratio has ranged from 1.87 to 3.56.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has shown similar fluctuations to the quick ratio, ranging from 1.86 to 3.56. This indicates that the company has maintained a strong position in terms of its ability to cover its short-term liabilities with cash on hand.
Overall, Lumentum Holdings Inc has demonstrated strong liquidity ratios, with consistent coverage of short-term obligations with current assets and cash. However, management should continue to monitor these ratios to ensure the company maintains a healthy liquidity position.
Additional liquidity measure
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 79.17 | 65.69 | 73.99 | 68.03 | 52.23 | 46.66 | 38.15 | 40.96 | 27.56 | 28.21 | 26.31 | 30.80 | 22.79 | 37.45 | 32.78 | 22.30 | 12.46 | 7.54 | 9.58 | 14.46 |
The cash conversion cycle of Lumentum Holdings Inc, a measure of how efficiently the company manages its working capital, has shown some fluctuations over the past few quarters.
In the most recent quarter ending June 30, 2024, the cash conversion cycle was 79.17 days, indicating that it takes the company approximately 79 days to convert its investments in inventory into cash received from sales. This represents an increase from the previous quarter's 65.69 days, suggesting a potential slowdown in the company's operating cycle efficiency.
Looking back over the past few quarters, we observe some variability in the cash conversion cycle, with fluctuations between 22.30 days (in December 31, 2020) to 79.17 days (in June 30, 2024). This variability may indicate changes in the company's inventory management, accounts receivable collection, and accounts payable practices.
Overall, a lower cash conversion cycle is generally preferred as it signifies that the company is able to quickly convert its investments into cash, improving liquidity and potentially enhancing overall financial performance. Lumentum Holdings Inc may benefit from analyzing the factors contributing to the fluctuations in its cash conversion cycle and implementing strategies to optimize its working capital management for improved efficiency and profitability.