Synnex Corporation (SNX)

The liquidity ratios of TD Synnex Corp indicate its ability to meet short-term financial obligations. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has been declining over the past five years from 1.62 in 2019 to 1.20 in 2023. This suggests a potential weakening in the company's short-term liquidity position.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown a decreasing trend, falling from 1.06 in 2019 to 0.77 in 2023. This indicates a diminishing ability to meet short-term obligations with the most liquid assets.

Furthermore, the cash ratio, which specifically measures the company's ability to cover short-term liabilities with its cash and cash equivalents, has also exhibited a declining trend, dropping from 0.13 in 2019 to 0.10 in 2023. This decrease suggests a reduction in the company's immediate liquidity position.

Overall, the declining trend in these liquidity ratios may raise concerns about TD Synnex Corp's ability to meet its short-term financial obligations. It is crucial for the company to closely monitor its liquidity position and take appropriate measures to strengthen its ability to meet short-term liabilities.

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Additional liquidity measure

The cash conversion cycle of TD Synnex Corp has shown fluctuations over the past five years. In 2019, the company had the highest cash conversion cycle of 55.45 days, indicating a longer period to convert its investments in inventory and other resources into cash. However, the company managed to reduce this cycle to 29.19 days by the end of November 2023, reflecting an improvement in efficiently managing its working capital. This indicates that the company has become more effective in managing its cash flows, inventory, and receivables, which could positively impact its liquidity and overall financial performance.

It is important to note that the reduction in the cash conversion cycle can also suggest improved efficiency and effectiveness in managing the company's operations and its ability to generate cash from its core activities. This trend could be indicative of improved inventory management, faster collection of receivables, or better negotiation of payment terms with suppliers. Overall, the trend in the cash conversion cycle suggests that TD Synnex Corp has been actively working to optimize its working capital management.