Semtech Corporation (SMTC)

Quick ratio

		Jan 31, 2025	Jan 31, 2024	Jan 28, 2024	Jan 31, 2023	Jan 29, 2023
Cash	US$ in thousands	151,743	128,585	128,585	235,510	235,510
Short-term investments	US$ in thousands	12,716	14,545	14,545	12,557	12,557
Receivables	US$ in thousands	—	—	151,624	—	174,220
Total current liabilities	US$ in thousands	283,034	217,156	217,156	396,855	396,855
Quick ratio		0.58	0.66	1.36	0.63	1.06

January 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($151,743K + $12,716K + $—K) ÷ $283,034K
= 0.58

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets.

Looking at the quick ratio of Semtech Corporation over the past few years, we observe fluctuations in the company's liquidity position.

On January 29, 2023, the quick ratio was 1.06, indicating that Semtech had $1.06 in liquid assets available to cover each dollar of its current liabilities. This suggests a relatively stable liquidity position.

However, by January 31, 2023, the quick ratio had decreased significantly to 0.63, signaling a potential liquidity strain as the company had only $0.63 in liquid assets for every dollar of current liabilities.

The quick ratio improved notably on January 28, 2024, reaching 1.36, demonstrating an enhancement in Semtech's ability to meet its short-term obligations with liquid assets.

Subsequently, by January 31, 2024, the quick ratio dropped to 0.66, indicating a decrease in liquidity compared to the previous period.

As of January 31, 2025, the quick ratio further decreased to 0.58, signaling a potential liquidity challenge for Semtech Corporation in meeting its short-term obligations with its available liquid assets.

Overall, the fluctuating trend in Semtech's quick ratio suggests varying levels of liquidity and caution may be warranted in assessing the company's ability to handle short-term financial obligations effectively.