Somnigroup International Inc. (SGI)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 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
Current ratio 1.11 1.14 1.21 1.21 1.21 1.18 1.25 1.24 1.22 1.18 1.23 1.11 1.21 1.28 1.08 1.36 0.99 1.12 0.94 1.39
Quick ratio 0.12 0.10 0.10 0.10 0.08 0.09 0.57 0.54 0.50 0.54 0.56 0.49 0.68 0.87 0.61 0.77 0.46 0.65 0.49 0.76
Cash ratio 0.12 0.10 0.10 0.10 0.08 0.09 0.10 0.09 0.07 0.09 0.10 0.11 0.29 0.43 0.07 0.32 0.07 0.22 0.15 0.26

The current ratio of Somnigroup International Inc. has exhibited fluctuations over the years, ranging from a low of 0.94 in June 2020 to a high of 1.39 in March 2020. Generally, the company has maintained a current ratio above 1, indicating that it has sufficient current assets to cover its current liabilities. The current ratio peaked at 1.36 in March 2021 but has since stabilized around the range of 1.1 to 1.3.

The quick ratio, which excludes inventory from current assets, has also shown variability, with values ranging from 0.08 to 0.87. Somnigroup International's quick ratio dipped significantly in the latter part of 2023 and early 2024, potentially indicating a decrease in the company's ability to cover immediate liabilities with its most liquid assets.

The cash ratio, which represents the most stringent measure of liquidity, portrays a similar pattern to the quick ratio. It reached a peak of 0.43 in September 2021 but then declined gradually, hovering around the range of 0.08 to 0.12 in the most recent periods. This suggests that Somnigroup International may have reduced cash reserves relative to its current liabilities over time.

Overall, while the current ratio generally remains satisfactory, the downward trend in the quick and cash ratios towards the end of the timeline raises some concerns about Somnigroup International Inc.'s ability to meet its short-term obligations using its most liquid assets.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 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
Cash conversion cycle days 59.31 66.49 68.16 64.62 63.05 62.46 56.27 59.77 56.16 54.78 56.95 45.32 35.25 29.17 34.94 44.01 35.94 35.74 41.59 43.65

The cash conversion cycle of Somnigroup International Inc. provides valuable insights into the efficiency of its working capital management. The cycle represents the time it takes for the company to convert its investments in raw materials and other resources into cash flow from sales.

Analyzing the trend in the cash conversion cycle over the past few quarters, we observe fluctuations in the efficiency of Somnigroup's working capital management. The cycle ranged from a low of 29.17 days in September 2021 to a high of 68.16 days in June 2024. Generally, a shorter cash conversion cycle is preferred as it indicates that the company is able to quickly convert its investments into cash.

The increase in the cash conversion cycle from 29.17 days in September 2021 to 68.16 days in June 2024 suggests potential issues in managing the company's working capital effectively. A longer cash conversion cycle could indicate delays in collecting receivables, holding excess inventory, or taking longer to pay suppliers. These factors may lead to liquidity challenges and impact the company's overall financial health.

It is essential for Somnigroup International Inc. to closely monitor and optimize its cash conversion cycle to ensure efficient working capital management. By actively managing receivables, inventory levels, and payables, the company can strive to shorten its cycle and improve its cash flow position. This will contribute to better financial stability and support sustainable growth in the long run.