Semtech Corporation (SMTC)

Cash ratio

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Jan 26, 2020
Cash and cash equivalents	US$ in thousands	128,585	235,510	279,601	268,891	293,324
Short-term investments	US$ in thousands	14,545	12,557	12,402	11,989	10,700
Total current liabilities	US$ in thousands	217,156	396,855	128,399	109,573	98,641
Cash ratio		0.66	0.63	2.27	2.56	3.08

January 28, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($128,585K + $14,545K) ÷ $217,156K
= 0.66

The cash ratio of Semtech Corporation has exhibited a declining trend over the past five years based on the data provided. The ratio was 0.66 as of January 28, 2024, which indicates that for every dollar of current liabilities, the company has $0.66 in cash or cash equivalents on hand.

Comparing this to previous years, there was a decrease from 0.63 on January 29, 2023, while the cash ratio was notably higher at 2.27 on January 30, 2022, and 2.56 on January 31, 2021, showing a substantial decline over these two years. The highest cash ratio was recorded at 3.08 on January 26, 2020, indicating that the company had significantly more cash reserves relative to its current liabilities at that point in time.

The declining trend in the cash ratio may signal a potential liquidity concern for Semtech Corporation, as it suggests a decrease in the company’s ability to cover its short-term obligations with its available cash and cash equivalents. Further analysis would be required to understand the underlying factors contributing to this trend and to assess the company's overall liquidity position.