Sitime Corporation (SITM)
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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 5.13 | 21.32 | 21.76 | 26.44 | 19.80 | 18.92 | 15.15 | 18.72 | 16.74 | 9.66 | 12.75 | 13.69 | 5.91 | 6.00 | 2.74 | 1.68 | 1.87 |
| Quick ratio | 4.53 | 18.97 | 19.38 | 23.71 | 17.91 | 17.39 | 14.19 | 17.67 | 15.99 | 8.96 | 11.85 | 12.89 | 5.13 | 4.96 | 2.40 | 1.41 | 1.54 |
| Cash ratio | 4.35 | 18.16 | 18.87 | 22.85 | 16.69 | 16.11 | 13.30 | 16.77 | 14.96 | 7.99 | 10.68 | 11.82 | 3.84 | 3.94 | 2.12 | 1.14 | 1.19 |
SiTime Corp's liquidity ratios have exhibited a strong and consistent performance over the quarters, reflecting the company's ability to meet its short-term obligations.
The current ratio, which measures the company's ability to pay off its current liabilities with its current assets, has generally been well above 1, indicating a healthy liquidity position. The ratio has shown an upward trend over the quarters, from 19.80 in Q4 2022 to 26.44 in Q1 2023, reaching a peak in Q2 2023 at 21.76 before slightly declining in the subsequent quarters. This suggests that the company has ample current assets to cover its current liabilities, providing a cushion for unexpected expenses or downturns in the business.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also displayed a favorable trend. The company has consistently maintained quick ratios well above 1, indicating strong liquidity and a capacity to meet short-term obligations without relying on inventory. The ratio peaked in Q2 2023 at 19.65 before modestly decreasing in the following quarters.
Furthermore, the cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) available to cover current liabilities, has shown a robust performance. SiTime Corp has maintained cash ratios comfortably above 1, demonstrating a sound ability to settle immediate liabilities with cash on hand. The company's cash ratio reached its highest point in Q2 2023 at 19.14 before slightly decreasing in subsequent quarters.
Overall, SiTime Corp's liquidity ratios indicate a consistent and strong liquidity position, with ample current assets and cash reserves to cover short-term obligations. This bodes well for the company's financial health and ability to navigate potential liquidity challenges successfully.
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 390.60 | 344.18 | 288.86 | 239.17 | 208.17 | 158.91 | 97.17 | 120.11 | 112.44 | 97.10 | 111.10 | 99.54 | 116.14 | 115.67 |
The cash conversion cycle of SiTime Corp has shown some fluctuations over the past eight quarters. In Q4 2023, the company had a cash conversion cycle of 390.60 days, which increased from the previous quarter's 344.18 days. This indicates a longer time to convert its investments in inventory and accounts receivable into cash.
The trend in the cash conversion cycle has been increasing since Q1 2022 when it was at 120.11 days. This suggests that SiTime Corp may be facing challenges in managing its working capital efficiently, possibly due to slower collections from customers or higher levels of inventory.
Overall, a longer cash conversion cycle may tie up more of the company's capital and limit its ability to invest in growth opportunities or meet short-term obligations. SiTime Corp should closely monitor and address the factors contributing to the lengthening of its cash conversion cycle to ensure optimal efficiency in its working capital management.