Super Micro Computer Inc (SMCI)
Liquidity ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 3.81 | 2.31 | 1.91 | 1.93 | 2.25 |
| Quick ratio | 1.88 | 1.16 | 0.76 | 0.73 | 0.88 |
| Cash ratio | 0.71 | 0.32 | 0.18 | 0.24 | 0.30 |
Super Micro Computer Inc's liquidity ratios show a mixed trend over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has fluctuated but generally remained above 1, indicating that the company has had more than enough current assets to cover its current liabilities. The ratio improved from 2020 to 2023, peaking at 3.81 in June 2024, which suggests a strong liquidity position.
In contrast, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, shows a decline from 2020 to 2022 before increasing in the last two years. The ratio indicates the company's ability to meet short-term obligations without relying on the sale of inventory, with values below 1 potentially signaling liquidity concerns. Super Micro Computer Inc's quick ratio has rebounded from a low of 0.73 in 2021 to 1.88 in June 2024, indicating a significant improvement in short-term liquidity.
Lastly, the cash ratio, the most conservative measure of liquidity, reveals a downward trend from 2020 to 2022 before a sharp increase in 2023 and 2024. The cash ratio assesses a company's ability to cover its current liabilities with its cash and cash equivalents alone. While the ratio dipped to 0.18 in 2022, it rebounded to 0.71 by June 2024, suggesting a strengthening cash position.
Overall, Super Micro Computer Inc's liquidity ratios indicate that the company has generally maintained a sound liquidity position over the past five years, with improvements in certain ratios in more recent years. The increasing trend in the current ratio, quick ratio, and cash ratio reflects a positive liquidity outlook for the company. However, management should continue to monitor these ratios to ensure the company maintains adequate liquidity to meet its short-term obligations.
See also:
Additional liquidity measure
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 147.42 | 100.63 | 133.12 | 100.24 | 101.37 |
The cash conversion cycle of Super Micro Computer Inc has shown fluctuations over the past five years. As of June 30, 2020, the company's cash conversion cycle was 101.37 days, which decreased slightly to 100.24 days by June 30, 2021. However, the cycle increased significantly to 133.12 days by June 30, 2022, before decreasing again to 100.63 days by June 30, 2023. The cycle then increased to 147.42 days by June 30, 2024.
Overall, the trend in the cash conversion cycle indicates some variability in the company's ability to efficiently convert its resources into cash. The company may need to focus on managing its cash flows, inventory turnover, and accounts receivable collection to optimize its working capital management and improve its overall liquidity position.