Plexus Corp (PLXS)

Plexus Corp.'s liquidity ratios provide insight into the company's ability to meet short-term obligations and manage its current liabilities. The current ratio, which compares current assets to current liabilities, has shown a declining trend over the past five years, indicating a potential weakening in the company's short-term liquidity position. However, the ratio remains above 1, suggesting that Plexus Corp. has generally been able to cover its short-term obligations.

The quick ratio, which measures the company's ability to meet short-term obligations using its most liquid assets, has also shown a declining trend. This indicates that the company's ability to cover immediate liabilities using its most liquid assets has decreased over the years. While the ratio is below 1 for the most recent year, it's important to consider the nature of Plexus Corp.'s current assets to assess its ability to meet short-term obligations.

Lastly, the cash ratio, which specifically looks at the company's ability to cover its current liabilities with its cash and cash equivalents, has also shown a declining trend. This suggests that Plexus Corp.'s cash position in relation to its current liabilities has weakened over the years, posing potential challenges in meeting its short-term obligations solely with cash on hand.

Overall, the declining trend in all three liquidity ratios indicates the need for careful monitoring of Plexus Corp.'s short-term liquidity position and potential actions to strengthen it.

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Additional liquidity measure

The cash conversion cycle for Plexus Corp. has exhibited fluctuations over the past five years. In the most recent period, as of September 30, 2023, the cash conversion cycle was 144.92 days, indicating an increase from the prior year. This suggests that the company took longer to convert its investments in inventory and accounts receivable into cash during this period. Comparatively, in October 2, 2021, the cash conversion cycle was 96.73 days, which was lower than the most recent period but higher than the following year. In general, the trend in the cash conversion cycle has shown some variability, which could be indicative of changes in the company's management of inventory, accounts receivable, and accounts payable.