Sanmina Corporation (SANM)
Liquidity ratios
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.99 | 2.03 | 2.00 | 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 |
| Quick ratio | 0.32 | 0.36 | 0.35 | 0.34 | 0.33 | 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 |
| Cash ratio | 0.32 | 0.36 | 0.35 | 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 |
The current ratio of Sanmina Corporation has been relatively stable over the periods analyzed, ranging from 1.56 to 2.03, indicating the company's ability to cover its short-term liabilities with its current assets. The current ratio peaked in June 2024 at 2.03, showing a strong short-term liquidity position. However, the ratio dropped to 1.79 in March 2023 before gradually increasing again.
On the other hand, the quick ratio, which excludes inventory from current assets, shows a more conservative liquidity position for Sanmina Corporation. The quick ratio ranged from 0.20 to 0.41 over the periods analyzed, with a low of 0.20 in June 2022 and a peak of 0.41 in March 2021. The company's ability to cover its short-term obligations with its most liquid assets has shown some volatility.
The cash ratio, which is the most stringent measure of liquidity, also fluctuated for Sanmina Corporation, ranging from 0.20 to 0.52 over the periods analyzed. The company's cash ratio hit a low of 0.20 in June 2022 and a high of 0.52 in March 2020 and December 2019. This ratio shows the company's ability to cover its short-term obligations using only its cash and cash equivalents.
Overall, while the current ratio indicates a generally healthy liquidity position for Sanmina Corporation, the quick and cash ratios highlight potential liquidity challenges, particularly during certain periods of lower quick and cash assets relative to current liabilities. Management should closely monitor these ratios to ensure sufficient liquidity to meet the company's short-term obligations.
Additional liquidity measure
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.08 | -2.50 | -2.86 | -1.39 | -3.54 | -10.01 | -12.01 | -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 |
The cash conversion cycle of Sanmina Corporation has exhibited variability over the past few quarters. The company's cash conversion cycle has generally been negative, indicating that Sanmina has been able to convert its investments in inventory and receivables into cash at a quick pace.
In recent quarters, the cash conversion cycle has shown a trend of improvement, with the number of days gradually decreasing. The company managed to significantly reduce its cash conversion cycle in the most recent quarter, reaching a positive 0.08 days, suggesting an efficient management of working capital.
The negative cash conversion cycle indicates that Sanmina is effectively managing its inventory and accounts receivable, resulting in a shorter period between cash outflows for production and cash inflows from sales. This efficient cycle is a positive signal for the company's liquidity and cash flow management.
However, it is essential for Sanmina to sustain this trend and continue optimizing its working capital management to ensure efficient operations and healthy cash flows in the future.