Sanmina Corporation (SANM)

Quick ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cash	US$ in thousands	667,570	529,857	650,026	480,526	454,741
Short-term investments	US$ in thousands	—	—	—	—	0
Receivables	US$ in thousands	-8,000	-8,000	-7,000	-8,570	-12,481
Total current liabilities	US$ in thousands	2,033,330	2,471,420	1,762,990	1,522,590	1,683,020
Quick ratio		0.32	0.21	0.36	0.31	0.26

September 30, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($667,570K + $—K + $-8,000K) ÷ $2,033,330K
= 0.32

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. It is calculated by dividing the sum of cash, cash equivalents, and accounts receivable by the total current liabilities.

Analyzing Sanmina Corp's quick ratio over the past five years, we observe fluctuations in its liquidity position. In September 2023, the quick ratio stood at 1.18, indicating that the company had $1.18 of liquid assets available to cover each dollar of current liabilities. This represented an improvement from the previous year when the quick ratio was 0.91. However, comparing this with the ratios in the preceding years, we find that the quick ratio was relatively higher in October 2021 and October 2020 at 1.27 and 1.29 respectively, suggesting a stronger liquidity position during those periods. The quick ratio in September 2019 was similar to the recent ratio at 1.20.

The upward and downward movements in the quick ratio can be attributed to changes in the composition and amount of current assets and liabilities. It is important to interpret the quick ratio alongside other liquidity and efficiency measures to gain a comprehensive understanding of the company's short-term financial health.