Smart Global Holdings Inc (SGH)
Liquidity ratios
| Mar 1, 2024 | Dec 1, 2023 | Aug 25, 2023 | May 26, 2023 | Feb 24, 2023 | Nov 25, 2022 | Aug 26, 2022 | May 27, 2022 | Feb 25, 2022 | Nov 26, 2021 | Aug 27, 2021 | May 28, 2021 | Feb 26, 2021 | Nov 27, 2020 | May 29, 2020 | Feb 28, 2020 | Nov 29, 2019 | Aug 30, 2019 | May 31, 2019 | Mar 1, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.30 | 2.68 | 2.13 | 2.44 | 2.33 | 2.03 | 2.23 | 2.22 | 2.12 | 1.76 | 1.63 | 1.64 | 1.79 | 1.98 | 1.85 | 1.98 | 1.77 | 1.99 | 2.24 | 1.92 |
| Quick ratio | 2.37 | 1.96 | 1.43 | 1.68 | 1.44 | 1.14 | 1.40 | 1.45 | 1.43 | 1.08 | 0.94 | 0.95 | 1.07 | 1.34 | 1.17 | 1.31 | 1.17 | 1.38 | 1.57 | 0.29 |
| Cash ratio | 1.74 | 1.50 | 0.92 | 1.04 | 0.89 | 0.59 | 0.61 | 0.74 | 0.69 | 0.44 | 0.38 | 0.38 | 0.43 | 0.58 | 0.43 | 0.51 | 0.37 | 0.41 | 0.54 | 0.29 |
Smart Global Holdings Inc has shown a generally positive trend in its liquidity ratios over the past several quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been consistently above 2, indicating a healthy liquidity position. The current ratio increased from 1.92 in March 2019 to 3.30 in March 2024, showing a significant improvement in liquidity over the period.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a favorable trend. The quick ratio has generally been above 1, indicating the company's ability to meet its short-term obligations without relying heavily on inventory. The quick ratio increased from 1.38 in March 2019 to 2.37 in March 2024, reflecting improved liquidity management.
The cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, has also shown improvement over the period. The cash ratio increased from 0.29 in March 2019 to 1.74 in March 2024, indicating that the company has increased its cash reserves relative to its current liabilities.
Overall, the liquidity ratios of Smart Global Holdings Inc demonstrate a strong liquidity position and improvement in managing short-term obligations over the past few years. This trend is favorable for the company's overall financial health and ability to meet its short-term financial commitments.
Additional liquidity measure
| Mar 1, 2024 | Dec 1, 2023 | Aug 25, 2023 | May 26, 2023 | Feb 24, 2023 | Nov 25, 2022 | Aug 26, 2022 | May 27, 2022 | Feb 25, 2022 | Nov 26, 2021 | Aug 27, 2021 | May 28, 2021 | Feb 26, 2021 | Nov 27, 2020 | May 29, 2020 | Feb 28, 2020 | Nov 29, 2019 | Aug 30, 2019 | May 31, 2019 | Mar 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 60.10 | 55.07 | 63.52 | 68.10 | 77.12 | 83.78 | 78.23 | 66.12 | 64.53 | 54.67 | 51.96 | 54.75 | 38.78 | 36.97 | 50.02 | 52.93 | 54.84 | 50.90 | 49.92 | -25.83 |
The cash conversion cycle of Smart Global Holdings Inc fluctuated over the past years, ranging from a low of -25.83 days to a high of 83.78 days. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to more quickly convert its resources into cash, which is generally favorable.
Analyzing the trends in the cash conversion cycle, we observe that it has shown some volatility, with fluctuations in the cycle length over the periods. From the data provided, it appears that the company managed to significantly reduce its cash conversion cycle in some periods, potentially indicating improvements in inventory management, accounts receivable collections, and accounts payable turnover.
However, there are also periods where the cash conversion cycle lengthened, suggesting potential challenges in managing working capital effectively. These increases could be influenced by factors such as growing inventory levels, slower collections from customers, or delayed payments to suppliers.
Overall, Smart Global Holdings Inc should aim to consistently monitor and improve its cash conversion cycle to enhance operational efficiency, optimize working capital management, and ultimately improve cash flow generation.