Semtech Corporation (SMTC)

Quick ratio

Jan 31, 2025 Oct 31, 2024 Jul 31, 2024 Apr 30, 2024 Jan 31, 2024 Jan 28, 2024 Oct 31, 2023 Oct 29, 2023 Jul 31, 2023 Jul 30, 2023 Apr 30, 2023 Jan 31, 2023 Jan 29, 2023 Oct 31, 2022 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Apr 30, 2022 Jan 31, 2022 Jan 30, 2022
Cash US$ in thousands 151,700 136,504 115,928 126,777 128,585 128,585 123,820 123,820 147,912 147,912 164,198 235,510 235,510 617,801 617,801 362,150 275,184 275,184 279,601 279,601
Short-term investments US$ in thousands 12,716 — 12,294 12,092 14,545 14,545 12,725 12,725 12,870 12,870 12,803 12,557 12,557 1,025 1,025 11,766 11,544 11,544 12,872 12,402
Receivables US$ in thousands — — — — — 151,624 — 156,613 — 159,097 — — 174,220 — 80,539 — — — — 71,507
Total current liabilities US$ in thousands 283,000 235,491 224,673 224,891 217,156 217,156 238,997 238,997 321,057 321,057 309,756 396,855 396,855 140,093 140,093 140,129 110,416 110,416 128,399 128,399
Quick ratio 0.58 0.58 0.57 0.62 0.66 1.36 0.57 1.23 0.50 1.00 0.57 0.63 1.06 4.42 4.99 2.67 2.60 2.60 2.28 2.83

January 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($151,700K + $12,716K + $—K) ÷ $283,000K
= 0.58

The quick ratio of Semtech Corporation has fluctuated over the past few years. As of January 30, 2022, the quick ratio was high at 2.83, indicating a strong ability to meet short-term obligations with liquid assets. Despite a slight decrease to 2.28 on January 31, 2022, the quick ratio remained above 2, which is generally considered healthy.

The quick ratio remained relatively stable around 2.60 in the following months until October 30, 2022, when it significantly increased to 4.99, suggesting a substantial improvement in the company's liquidity position. However, by January 29, 2023, the quick ratio dropped sharply to 1.06 and continued to decline to 0.57 by April 30, 2023, indicating potential liquidity challenges.

The quick ratio fluctuated between 0.50 and 1.36 through July 31, 2024, suggesting ongoing variability in Semtech's ability to cover its short-term liabilities with its current assets. As of January 31, 2025, the quick ratio stood at 0.58, indicating that the company may still be facing liquidity concerns.

Overall, while Semtech Corporation has shown periods of strong liquidity with quick ratios above 2, there have been instances of declining ratios, raising questions about the company's ability to quickly cover its short-term obligations with its liquid assets. Investors and analysts may need to further explore the underlying reasons for these fluctuations in the quick ratio to assess Semtech's financial health accurately.