Lululemon Athletica Inc. (LULU)

Cash ratio

		Jan 31, 2025	Jan 31, 2024	Jan 28, 2024	Jan 31, 2023	Jan 29, 2023
Cash and cash equivalents	US$ in thousands	1,984,340	2,243,960	2,243,970	1,154,870	1,154,870
Short-term investments	US$ in thousands	—	8	8	8	8
Total current liabilities	US$ in thousands	2,030,320	1,631,260	1,631,260	1,492,200	1,492,200
Cash ratio		0.98	1.38	1.38	0.77	0.77

January 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,984,340K + $—K) ÷ $2,030,320K
= 0.98

The cash ratio is a financial metric used to assess a company's ability to cover its short-term liabilities with its available cash and cash equivalents. For Lululemon Athletica Inc., the cash ratio has fluctuated over the years:

- As of January 29, 2023, and January 31, 2023, the cash ratio was 0.77, indicating that the company had $0.77 in cash and cash equivalents for every $1 of current liabilities.
- By January 28, 2024, and January 31, 2024, the cash ratio improved to 1.38, implying that the company's liquidity position strengthened as it had $1.38 in cash to cover every $1 of short-term obligations.
- However, as of January 31, 2025, the cash ratio decreased to 0.98, suggesting a slight decrease in the company's ability to meet its short-term obligations solely with cash resources.

Overall, fluctuations in the cash ratio of Lululemon Athletica Inc. over the years indicate changes in the company's liquidity position and its ability to manage short-term financial obligations using cash reserves. An investor or analyst may further analyze the reasons behind these changes to assess the company's financial health and liquidity management strategies.