Sonos Inc (SONO)
Liquidity ratios
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.51 | 1.65 | 1.92 | 2.02 | 1.86 | 2.06 | 2.09 | 1.85 | 1.62 | 1.83 | 2.18 | 1.94 | 2.01 | 2.27 | 2.37 | 1.98 | 1.68 | 1.89 | 2.18 | 1.84 |
| Quick ratio | 0.73 | 1.11 | 1.19 | 1.46 | 0.81 | 1.11 | 0.84 | 1.13 | 0.70 | 0.87 | 1.31 | 1.26 | 1.56 | 1.67 | 1.72 | 1.49 | 1.04 | 1.28 | 1.33 | 1.09 |
| Cash ratio | 0.60 | 0.75 | 0.96 | 1.24 | 0.62 | 0.78 | 0.84 | 0.90 | 0.51 | 0.87 | 1.31 | 1.26 | 1.34 | 1.67 | 1.72 | 1.49 | 1.04 | 1.28 | 1.33 | 1.09 |
Sonos Inc's liquidity ratios show a fluctuating trend over the past several quarters.
The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been above 1, indicating a healthy liquidity position. However, it has shown some variability over time, ranging from a low of 1.51 to a high of 2.37. The current ratio appears to have peaked in the first quarter of 2021 at 2.37 before gradually declining to 1.51 by September 2024.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also demonstrates fluctuation but generally remains above 1 in most periods. This indicates that Sonos Inc has an adequate ability to meet its short-term obligations without relying on inventory sales. The quick ratio hit its lowest point at 0.70 in September 2022 and reached a high of 1.72 in March 2021.
The cash ratio, representing the company's ability to cover its current liabilities with cash and cash equivalents, has also fluctuated over time. This ratio has ranged from a low of 0.51 to a high of 1.72, indicating variability in the company's cash reserves relative to its short-term obligations. The cash ratio peaked in the first quarter of 2021 at 1.72 before declining to 0.60 by September 2024.
Overall, while Sonos Inc generally maintains liquidity ratios above the industry benchmark, the fluctuating trend suggests the need for careful monitoring of its liquidity position to ensure the company can meet its short-term financial obligations effectively.
Additional liquidity measure
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 21.28 | 23.53 | 32.75 | 17.50 | 56.41 | 62.93 | 37.05 | 40.17 | 51.79 | 7.20 | -1.71 | -36.90 | 13.25 | -14.43 | -18.27 | -46.37 | -21.51 | -5.66 | 9.89 | -25.16 |
The cash conversion cycle of Sonos Inc has exhibited fluctuations over the past few quarters. The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory and other resources back into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to efficiently convert its resources into cash, while a longer cycle may suggest inefficiencies in managing working capital.
Looking at the data provided, we can see that Sonos Inc experienced a positive cash conversion cycle in most quarters, indicating that the company takes longer to convert its investments in resources back into cash flows from sales. The cycle ranged from a low of -46.37 days in December 2020, implying that the company was able to convert its resources into cash quickly during that period, to a high of 62.93 days in June 2023, indicating a longer cycle and potential challenges in managing working capital efficiency.
Overall, the trend in the cash conversion cycle for Sonos Inc appears to be somewhat volatile, with fluctuations in the efficiency of working capital management. It is important for the company to closely monitor and potentially improve its cash conversion cycle to ensure that its resources are effectively utilized and cash flows are optimized.