Starbucks Corporation (SBUX)

Liquidity ratios

Sep 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 Sep 30, 2019
Current ratio 0.75 0.86 0.70 0.78 0.78 0.77 0.75 0.77 0.84 0.83 0.81 1.20 1.02 1.07 1.06 1.06 0.95 0.70 0.68 0.92
Quick ratio 0.52 0.56 0.48 0.55 0.52 0.38 0.36 0.48 0.39 0.44 0.45 0.93 0.75 0.78 0.82 0.80 0.69 0.48 0.48 0.62
Cash ratio 0.39 0.42 0.36 0.42 0.39 0.38 0.36 0.35 0.39 0.44 0.45 0.81 0.63 0.62 0.67 0.63 0.52 0.32 0.36 0.45

Starbucks Corporation's liquidity ratios have shown fluctuations over the past few quarters. The current ratio, which indicates the company's ability to cover short-term obligations with its current assets, has ranged from 0.70 to 1.20, with the most recent figure at 0.75. This suggests that the company may have difficulties meeting its short-term liabilities with its current assets.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has ranged from 0.36 to 0.93, with the latest figure at 0.52. This indicates that Starbucks may face challenges in quickly meeting its short-term obligations without relying on inventory.

The cash ratio, which measures a company's ability to cover its current liabilities with cash and cash equivalents, has varied from 0.32 to 0.81, with the most recent reading at 0.39. This implies that Starbucks has a moderate ability to cover its current liabilities solely with cash and cash equivalents.

Overall, the liquidity ratios of Starbucks Corporation indicate a fluctuating liquidity position that may warrant attention to ensure the company can meet its short-term obligations effectively.

See also:

Starbucks Corporation Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Sep 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 Sep 30, 2019
Cash conversion cycle days 17.18 18.20 16.74 19.33 25.56 16.40 21.89 35.79 19.91 18.63 11.31 25.28 28.02 33.30 34.15 38.39 47.76 34.91 24.42 24.78

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It is calculated by adding the number of days it takes for a company to sell its inventory (Days Sales of Inventory) to the number of days it takes to collect its accounts receivable (Days Sales Outstanding), and then subtracting the number of days it takes to pay its accounts payable.

Analyzing Starbucks Corporation's cash conversion cycle over the recent quarters, we observe fluctuations in the efficiency of its cash conversion process. A shorter cash conversion cycle indicates that Starbucks is able to generate cash more quickly from its operating activities, which is generally a positive indicator of financial health.

In the most recent quarter, for September 30, 2024, Starbucks had a cash conversion cycle of 17.18 days. This suggests that the company was able to manage its inventory effectively, collect payments from customers promptly, and efficiently pay its suppliers.

Comparing this to previous quarters, we see fluctuations in the cash conversion cycle, with improvements in efficiency observed in some quarters and deteriorations in others. For example, in December 2021, Starbucks achieved an exceptionally low cash conversion cycle of 11.31 days, indicating very efficient cash management. On the other hand, in December 2020, the company's cash conversion cycle was 34.15 days, highlighting challenges in the cash conversion process.

Overall, by monitoring the trend of Starbucks Corporation's cash conversion cycle over time, investors and analysts can gain insights into the company's operational efficiency, liquidity management, and potential improvements in working capital management.