Plexus Corp (PLXS)

Quick ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cash	US$ in thousands	345,109	256,233	274,805	270,172	385,807
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	622,366	661,542	737,696	519,684	482,086
Total current liabilities	US$ in thousands	1,643,290	1,812,670	2,006,190	1,128,700	1,003,520
Quick ratio		0.59	0.51	0.50	0.70	0.86

September 30, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($345,109K + $—K + $622,366K) ÷ $1,643,290K
= 0.59

The quick ratio, also known as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets. A quick ratio below 1 indicates that a company may have difficulty meeting its short-term obligations.

Analyzing Plexus Corp's quick ratio over the past five years, we observe a declining trend from 0.86 in 2020 to 0.59 in 2024. This downward trend suggests a weakening liquidity position for Plexus Corp in recent years, as its ability to cover short-term liabilities with liquid assets has diminished.

The quick ratios of 0.51 in 2023 and 0.50 in 2022 indicate that Plexus Corp's liquidity position was particularly strained in those years, with the company potentially facing challenges in meeting its short-term obligations.

While the quick ratio improved slightly to 0.70 in 2021, it still remained below the desirable threshold of 1, indicating ongoing liquidity concerns for Plexus Corp during that period.

Overall, the downward trend in Plexus Corp's quick ratio signals a potential liquidity risk, and management may need to focus on strengthening the company's short-term liquidity position to ensure its ability to meet financial obligations as they come due.