Plexus Corp (PLXS)

Liquidity ratios

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 Jun 30, 2019 Mar 31, 2019
Current ratio 1.52 1.47 1.44 1.45 1.44 1.40 1.43 1.47 1.58 1.71 1.81 1.88 1.84 1.77 1.72 1.77 1.79 1.78 1.78 1.83
Quick ratio 0.51 0.51 0.49 0.14 0.50 0.50 0.15 0.19 0.16 0.70 0.30 0.32 0.37 0.38 0.29 0.25 0.28 0.26 0.23 0.22
Cash ratio 0.13 0.14 0.13 0.14 0.13 0.14 0.15 0.19 0.16 0.24 0.30 0.32 0.37 0.38 0.29 0.25 0.28 0.26 0.23 0.22

Plexus Corp's liquidity ratios show fluctuations over the past five quarters. The current ratio has generally been above 1, indicating that the company has had more current assets than current liabilities to cover its short-term obligations. However, it has declined slightly from 1.78 in Q1 2019 to 1.52 in Q4 2023.

The quick ratio has also varied, with a low of 0.14 in Q1 2020 and Q1 2023, indicating a lower ability to cover immediate liabilities with its most liquid assets. Interestingly, there was a significant improvement in Q2 and Q3 of 2021, with readings above 0.70 and 0.30 respectively.

The cash ratio has been relatively stable, ranging between 0.13 to 0.19, reflecting the ability of the company to cover its short-term liabilities using only cash and cash equivalents. Notably, the ratio increased from 0.22 in Q1 2019 to 0.14 in Q4 2023.

Overall, while Plexus Corp's current ratio has remained above 1, its quick ratio saw fluctuations, and the cash ratio remained consistent. Further analysis into the company's cash management practices and accounts receivable turnover may provide a deeper understanding of its liquidity position.

Additional liquidity measure

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 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 120.75 116.69 118.73 83.94 116.02 136.86 99.69 90.82 109.24 79.74 44.33 36.05 40.74 36.14 59.49 64.96 34.42 41.50 39.95 40.83

The cash conversion cycle of Plexus Corp has shown some fluctuations over the past few years. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It is calculated as the sum of the days inventory outstanding (DIO), days sales outstanding (DSO), and days payables outstanding (DPO).

From the data provided, we can observe that the cash conversion cycle has varied between 34.42 days to 136.86 days over the last five years. A shorter cash conversion cycle indicates that the company is efficiently managing its working capital and converting inventory and receivables into cash quickly. A longer cash conversion cycle may suggest inefficiencies in the company's operations or challenges in managing its cash flow.

In the recent period, Plexus Corp has experienced a gradual increase in its cash conversion cycle, reaching 120.75 days as of December 31, 2023. This increase could be attributed to factors such as a longer DSO (days sales outstanding), indicating slower collections from customers, or a longer DIO (days inventory outstanding), signaling excess inventory levels.

Analyzing the components of the cash conversion cycle individually can provide insights into where the company may be experiencing challenges. For instance, a high DSO could indicate that the company needs to improve its credit and collection policies, while a high DIO might suggest inefficient inventory management practices.

Overall, monitoring and managing the cash conversion cycle is crucial for Plexus Corp to optimize its working capital, improve cash flow efficiency, and ultimately enhance its financial performance.