Starbucks Corporation (SBUX)

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 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 1.31 0.94
Quick ratio 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 0.97 0.57
Cash ratio 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 0.82 0.40

The liquidity ratios of Starbucks Corp. indicate the company's ability to meet its short-term financial obligations. The current ratio, which measures the company's ability to pay its short-term liabilities with its short-term assets, has fluctuated between 0.70 and 0.83 over the past eight quarters. This suggests that for every dollar of current liabilities, Starbucks had between $0.70 and $0.83 of current assets available to meet those obligations.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has ranged from 0.52 to 0.62 during the same period. This indicates that the company may have had more limited ability to cover its short-term liabilities using only its most liquid assets.

Lastly, the cash ratio, which focuses exclusively on the most liquid assets (cash and cash equivalents) compared to current liabilities, has varied between 0.39 and 0.48. This implies that Starbucks had between $0.39 and $0.48 of cash and cash equivalents for every dollar of current liabilities.

The declining trend in these ratios over the period suggests a potential decrease in the company's liquidity and ability to meet its short-term obligations. However, it's important to conduct further analysis and consider other factors, such as industry benchmarks and management commentary, to fully assess the company's liquidity position.

See also:

Starbucks Corporation Liquidity Ratios (Quarterly Data)

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 15.71 17.86 22.78 13.01 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 21.92 21.73

The cash conversion cycle (CCC) of Starbucks Corp. has exhibited a fluctuating trend over the past eight quarters, ranging from a low of 11.59 days to a high of 14.94 days. Generally, the company's CCC has been decreasing over the past year, indicating an improvement in its working capital management.

The CCC represents the time it takes for a company to convert its investments in inventory and other resources into cash from sales. A shorter CCC indicates that the company is efficiently managing its working capital and converting its resources into cash more quickly.

Starbucks' management should continue to focus on streamlining its operations to further reduce its CCC, as this would free up cash flow and improve the company's overall liquidity position. Additionally, maintaining an efficient CCC can contribute to better financial performance and sustainable growth in the long term.