Lululemon Athletica Inc. (LULU)

Cash ratio

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Jan 28, 2024	Oct 31, 2023	Oct 29, 2023	Jul 31, 2023	Jul 30, 2023	Apr 30, 2023	Jan 31, 2023	Jan 29, 2023	Oct 31, 2022	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Apr 30, 2022	Jan 31, 2022	Jan 30, 2022
Cash and cash equivalents	US$ in thousands	1,984,340	1,188,420	1,610,110	1,900,660	2,243,960	2,243,970	1,091,140	1,091,140	1,107,530	1,107,530	950,607	1,154,870	1,154,870	352,624	352,624	498,831	649,016	649,016	1,259,870	1,259,870
Short-term investments	US$ in thousands	—	—	31	8	8	8	47	47	8	8	8	8	8	8	8	34,894	136,127	136,127	318,698	—
Total current liabilities	US$ in thousands	1,839,630	1,996,870	1,468,650	1,383,570	1,631,260	1,631,260	1,448,110	1,448,110	1,386,370	1,386,370	1,256,770	1,492,200	1,492,200	1,322,840	1,322,840	1,207,210	1,206,890	1,206,890	1,405,330	1,405,330
Cash ratio		1.08	0.60	1.10	1.37	1.38	1.38	0.75	0.75	0.80	0.80	0.76	0.77	0.77	0.27	0.27	0.44	0.65	0.65	1.12	0.90

January 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,984,340K + $—K) ÷ $1,839,630K
= 1.08

The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.

Analyzing the cash ratio trend of Lululemon Athletica Inc. over the given period, we observe fluctuations in the ratio. The cash ratio ranged from as low as 0.27 to as high as 1.38.

From January 30, 2022, to July 31, 2024, the cash ratio remained mostly below the ideal value of 1, indicating that Lululemon had limited cash reserves compared to its short-term liabilities during these periods.

However, towards the end of the period, the cash ratio improved significantly, reaching its peak of 1.38 on January 28, 2024, and maintaining levels above 1 thereafter. This suggests that Lululemon started to build up its cash reserves and had a stronger ability to cover its short-term obligations without relying on external sources of funding.

Overall, Lululemon Athletica Inc. experienced fluctuations in its cash ratio but showed a positive trend towards strengthening its liquidity position in the later years of the analyzed period.