SanDisk Corp (SNDK)
Liquidity ratios
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Current ratio | 2.82 | 1.92 | 3.78 | 2.45 | 0.00 |
| Quick ratio | 2.00 | 1.03 | 2.36 | 1.53 | 2.61 |
| Cash ratio | 2.00 | 1.03 | 2.36 | 1.53 | 2.61 |
SanDisk Corp's liquidity ratios have shown some fluctuations over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, improved from 2.45 in 2012 to 3.78 in 2013 before declining to 1.92 in 2014 and then increasing to 2.82 in 2015. This indicates that the company's short-term liquidity position strengthened in 2013 but deteriorated in 2014 before improving again in 2015.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. The quick ratio decreased from 2.61 in 2011 to 1.03 in 2014 before recovering to 2.00 in 2015. This suggests that SanDisk Corp's ability to meet its short-term obligations without relying on inventory declined in 2014 but improved in 2015.
The cash ratio, the most conservative liquidity ratio that only considers cash and cash equivalents to cover current liabilities, followed a similar trend to the quick ratio. It dropped from 2.61 in 2011 to 1.03 in 2014 and then rose to 2.00 in 2015. This indicates fluctuations in the company's ability to cover its short-term debts using its cash and cash equivalents during the period under review.
Overall, SanDisk Corp's liquidity ratios reflect some variability in its short-term liquidity position over the years, with improvements in 2013 and 2015 following a decline in 2014. It is essential for the company to closely monitor and manage its liquidity position to ensure it can meet its financial obligations effectively.
Additional liquidity measure
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 89.31 | 71.57 | 83.66 | 81.26 | 96.54 |
The cash conversion cycle of SanDisk Corp has fluctuated over the years based on the provided data. In 2011, the company's cash conversion cycle was 96.54 days, indicating that it took the company approximately 96.54 days to convert its investments in raw materials into cash flows from sales.
Over the next few years, there was a general trend of improvement in the cash conversion cycle, with the number decreasing to 81.26 days in 2012, 83.66 days in 2013, and 71.57 days in 2014. This suggests that SanDisk Corp was able to manage its working capital more efficiently, resulting in a shorter cash conversion cycle.
However, in 2015, there was a slight increase in the cash conversion cycle to 89.31 days, indicating a potential delay in converting inventory into sales and subsequently into cash. It is important for the company to closely monitor its inventory management and collection processes to ensure optimal efficiency in converting investments into cash inflows.
Overall, the trend in the cash conversion cycle of SanDisk Corp shows both improvement and potential areas for further optimization in working capital management.