Sanmina Corporation (SANM)
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 | 1.99 | 1.91 | 1.83 | 1.79 | 0.28 | 1.57 | 1.56 | 1.63 | 1.71 | 1.86 | 1.93 | 2.01 | 1.93 | 1.85 | 1.58 | 1.58 | 1.83 | 1.74 | 1.64 | 1.31 |
| Quick ratio | 0.34 | 0.32 | 0.30 | 0.32 | 0.28 | 0.21 | 0.20 | 0.24 | 0.30 | 0.36 | 0.39 | 0.41 | 0.35 | 0.32 | 0.52 | 0.52 | 0.28 | 0.27 | 0.23 | 0.17 |
| Cash ratio | 0.35 | 0.33 | 0.30 | 0.32 | 0.29 | 0.21 | 0.20 | 0.24 | 0.30 | 0.37 | 0.39 | 0.41 | 0.35 | 0.32 | 0.52 | 0.52 | 0.28 | 0.27 | 0.23 | 0.17 |
The liquidity ratios of Sanmina Corporation show fluctuations over the periods analyzed. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has generally been improving from the end of 2020 to the end of 2023, with the latest reading at 1.99, indicating a healthier liquidity position.
On the other hand, the quick ratio, a more stringent measure of liquidity excluding inventory, has also shown improvement over the same period, reflecting better short-term solvency, although it remains relatively low compared to the current ratio.
The cash ratio, which focuses solely on the most liquid assets, has followed a similar trend to the quick ratio, reinforcing the company's ability to meet its immediate cash obligations.
Overall, the current, quick, and cash ratios suggest that Sanmina Corporation has made progress in enhancing its liquidity position and managing its short-term financial obligations effectively. However, the company should continue to monitor and maintain these ratios at healthy levels to ensure ongoing financial stability.
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 | -1.40 | -5.90 | -10.09 | -12.10 | -23.98 | -22.81 | -27.20 | -29.01 | -25.37 | -24.57 | -22.71 | -18.20 | -18.64 | -19.78 | -20.81 | -13.02 | -16.80 | -20.84 | -20.76 | -21.17 |
The cash conversion cycle of Sanmina Corporation has shown varying trends over the past few quarters. The company's ability to convert its resources into cash has been noteworthy, as indicated by consistently negative values for the cash conversion cycle. A negative cash conversion cycle implies that Sanmina is able to generate cash from its operating activities before having to pay its suppliers, which is generally a positive sign.
The cycle peaked at -12.10 days in March 2023 before showing improved performance in the subsequent quarters. This improvement suggests that Sanmina has been managing its working capital efficiently, with faster conversion of inventory into sales and subsequently into cash. A shorter cash conversion cycle indicates that the company is able to collect payments from customers and convert inventory into cash quickly.
The negative values throughout the periods indicate that Sanmina has been effective in managing its cash flow and working capital, potentially by negotiating favorable credit terms with suppliers and maintaining efficient inventory turnover. Despite fluctuations in the cycle, the overall trend suggests that Sanmina has been successful in optimizing its working capital management to support its operations and financial health.