Synopsys Inc (SNPS)

Liquidity ratios

Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020 Apr 30, 2020 Jan 31, 2020 Oct 31, 2019 Jul 31, 2019 Apr 30, 2019
Current ratio 1.29 1.15 1.20 1.15 1.11 1.09 1.14 1.25 1.19 1.16 1.18 1.19 1.10 1.19 1.06 0.95 0.95 0.99 0.99 0.95
Quick ratio 0.88 0.87 0.92 0.90 0.86 0.87 0.87 0.99 0.93 0.91 0.90 0.92 0.83 0.97 0.82 0.73 0.73 0.75 0.70 0.67
Cash ratio 0.48 0.53 0.67 0.62 0.48 0.56 0.60 0.70 0.51 0.65 0.66 0.65 0.47 0.58 0.51 0.42 0.34 0.42 0.42 0.36

Synopsys, Inc.'s liquidity ratios reflect the company's ability to meet its short-term obligations. The current ratio has shown improvement over the quarters, reaching 1.29 in Q1 2024. This indicates that the company has $1.29 in current assets for every dollar of current liabilities, providing a healthy buffer.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also improved over time, standing at 1.14 in Q1 2024. This suggests that Synopsys has sufficient liquid assets to cover its short-term liabilities without relying on the sale of inventory.

The cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) relative to current liabilities, fluctuated during the observed periods but generally remained above 0.7. This indicates that the company has a solid cash position to cover its immediate liabilities.

Overall, Synopsys, Inc.'s liquidity ratios demonstrate a positive trend, reflecting the company's ability to meet its short-term financial obligations comfortably across the quarters analyzed.

See also:

Synopsys Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020 Apr 30, 2020 Jan 31, 2020 Oct 31, 2019 Jul 31, 2019 Apr 30, 2019
Cash conversion cycle days 151.49 113.59 111.33 109.09 123.45 120.33 103.43 108.90 157.80 137.84 137.36 136.93 168.03 156.93 125.86 124.23 145.32 123.30 117.81 124.42

The cash conversion cycle of Synopsys, Inc. has shown some fluctuations over the past eight quarters. In Q1 2024, the cash conversion cycle increased to 151.49 days from the previous quarter's 109.84 days, indicating that it took longer for the company to convert its investments in inventory and other resources into cash during this period.

This increase in the cash conversion cycle in Q1 2024 follows a trend of fluctuation in the cycle, as seen in previous quarters where the cycle varied between 103.43 days and 123.45 days. Generally, a longer cash conversion cycle suggests that the company is taking more time to collect cash from customers relative to the time it takes to pay its suppliers and convert inventory into sales.

It is important for Synopsys, Inc. to monitor and manage its cash conversion cycle effectively to optimize its working capital management. The company may need to focus on improving its inventory turnover, accelerating accounts receivable collections, and optimizing accounts payable terms to shorten the cash conversion cycle and enhance its overall liquidity position.