Smart Global Holdings Inc (SGH)

Current ratio

		Aug 25, 2023	Aug 26, 2022	Aug 27, 2021	Aug 28, 2020	Aug 30, 2019
Total current assets	US$ in thousands	907,402	1,151,860	950,818	556,710	472,260
Total current liabilities	US$ in thousands	426,250	515,540	583,798	282,489	237,900
Current ratio		2.13	2.23	1.63	1.97	1.99

August 25, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $907,402K ÷ $426,250K
= 2.13

The current ratio for SMART Global Holdings Inc has shown some fluctuations over the past five years. The current ratio measures the company's ability to meet its short-term obligations with its short-term assets. A ratio above 1 indicates that the company has more current assets than current liabilities, which is generally considered a favorable sign.

In August 2023, the current ratio was 2.13, suggesting that the company had $2.13 in current assets for every $1 of current liabilities. This represented a slight decrease from the previous year, when the current ratio was 2.23. While a current ratio above 2 is generally seen as a healthy sign, this decline may indicate a shift in the company's liquidity position.

Looking back further, in August 2021, the company's current ratio was 1.63, which was lower than the preceding and subsequent years. This may have raised concerns about the company's ability to cover its short-term obligations at that time.

However, it is positive to note that in the years 2020 and 2019, the current ratio was 1.97 and 1.99, respectively, indicating a strong ability to cover short-term obligations with current assets.

In summary, SMART Global Holdings Inc's current ratio has shown some variability, with the most recent ratio of 2.13 indicating a relatively healthy liquidity position, while the lower ratio in 2021 may have raised some concerns. This ratio should be considered alongside other financial indicators and factors affecting the company's operations and industry.