Synnex Corporation (SNX)

Synnex Corporation's liquidity ratios have shown a mixed trend over the past five years.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 1.56 in November 30, 2020, to 1.24 in November 30, 2024. While a current ratio above 1 indicates that the company has more current assets than current liabilities, the decreasing trend indicates a potential weakening in the company's short-term liquidity position.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also showed a declining trend from 0.97 in November 30, 2020, to 0.66 in November 30, 2024. This decrease suggests that the company may be less able to meet its immediate obligations without relying on inventory, which could signal potential liquidity challenges.

The cash ratio, which is the most conservative liquidity ratio that measures the company's ability to cover its current liabilities with its cash and cash equivalents, declined from 0.28 in November 30, 2020, to 0.06 in November 30, 2024. Although the cash ratio remained low throughout the period, the decreasing trend indicates a gradual reduction in the company's cash reserves relative to its short-term liabilities.

Overall, Synnex Corporation's liquidity ratios reveal potential concerns about its ability to meet its short-term obligations without relying heavily on inventory or cash. Investors and stakeholders may need to monitor these ratios closely to assess the company's liquidity position accurately.

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Additional liquidity measure

Synnex Corporation's cash conversion cycle has shown a consistent improvement over the years, decreasing from 49.99 days as of November 30, 2020, to 19.03 days as of November 30, 2024. This is a positive trend indicating the company's ability to efficiently manage its working capital and cash flow.

The decreasing trend signifies that Synnex Corporation has been able to reduce the time it takes to convert its investments in inventory and accounts receivable into cash, which is a key indicator of operational efficiency. A shorter cash conversion cycle implies that the company is able to generate cash more quickly from its sales, thus improving liquidity and potentially reducing the need for external financing.

Overall, the consistent reduction in Synnex Corporation's cash conversion cycle reflects effective management of its working capital and suggests improved financial health and operational efficiency over the years.