Science Applications International Corporation Common Stock (SAIC)

Science Applications International Corporation's liquidity ratios have shown some fluctuation over the past few years.

The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has ranged from 0.93 to 1.14. Although the current ratio dipped below 1 in some periods, indicating potential short-term liquidity challenges, it generally improved in the most recent period, reaching 1.13. This suggests the company's current assets are able to cover its current liabilities more comfortably.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also displayed variability, ranging from 0.19 to 1.08. The quick ratio showed significant improvement in the last few periods, indicating the company may have reduced its reliance on inventory to meet short-term obligations.

The cash ratio, which specifically focuses on the company's ability to cover current liabilities with its cash and cash equivalents, varied from 0.03 to 0.29. The trend in the cash ratio also showed improvement in the most recent periods, suggesting the company may have increased its cash reserves relative to its current liabilities.

Overall, while the company experienced some fluctuations in its liquidity ratios, the recent improvements in the current, quick, and cash ratios indicate that Science Applications International Corporation has enhanced its ability to meet short-term obligations and manage liquidity effectively.

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Additional liquidity measure

The cash conversion cycle of Science Applications International Corporation Common Stock has shown fluctuations over the period under review.

On May 1, 2020, the company had a relatively short cash conversion cycle of 11.12 days, indicating that it was efficient in converting its inventory to cash. However, by July 31, 2020, the cash conversion cycle increased significantly to 67.55 days, suggesting that the company took longer to convert its investments in inventory back to cash.

Subsequently, there were further fluctuations in the cash conversion cycle numbers, with peaks observed in October 30, 2020 (65.78 days), April 30, 2021 (61.65 days), and July 30, 2021 (62.59 days). These periods may indicate potential challenges in managing working capital efficiently.

In January 28, 2022, there was a notable improvement in the cash conversion cycle, which decreased to 20.07 days. This improvement continued in February 3, 2023, and May 5, 2023, where the cycle was at its lowest points of 15.43 days and 4.11 days, respectively, indicating enhanced efficiency in converting inputs into cash.

However, the cycle started increasing again, reaching 50.17 days on August 4, 2023. Subsequent periods also showed relatively higher cash conversion cycle numbers, with some fluctuations, showing the company may have faced challenges in managing its cash conversion efficiency.

Overall, analyzing the trend, it is crucial for Science Applications International Corporation Common Stock to monitor its cash conversion cycle closely and implement strategies to optimize working capital management and improve efficiency in converting investments in inventory back to cash.