Sonos Inc (SONO)
Liquidity ratios
| 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 | Sep 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 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 | 1.69 |
| Quick ratio | 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 | 0.84 |
| Cash ratio | 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 | 0.84 |
Sonos Inc's liquidity ratios display fluctuations over the disclosed period. The current ratio, a measure of the company's ability to cover its short-term obligations with its current assets, shows some variability. It has ranged from 1.62 to 2.37, with the most recent figure at 1.65 as of June 30, 2024. This ratio indicates the company's ability to meet its short-term liabilities but shows some inconsistency.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has varied significantly, ranging from 0.70 to 1.72. The quick ratio stood at 1.11 as of June 30, 2024, suggesting that the company may at times have a lower ability to cover its short-term liabilities, especially in periods with higher inventory levels.
The cash ratio, a stringent measure of liquidity that examines the company's ability to cover its current liabilities using only cash and cash equivalents, has fluctuated between 0.51 and 1.72. As of June 30, 2024, the cash ratio was 0.75, indicating that the company may have a relatively lower ability to cover its short-term obligations with cash alone.
Overall, while the current ratio generally portrays a healthy liquidity position, the quick ratio and cash ratio indicate fluctuations in the company's ability to meet its short-term obligations without relying on inventory or non-cash assets. Continued monitoring of these ratios is advisable to assess Sonos Inc's ongoing liquidity position effectively.
Additional liquidity measure
| 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 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 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 | -10.83 |
Sonos Inc's cash conversion cycle has shown fluctuations over the past quarters, indicating variations in the efficiency of its working capital management. The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory into cash flows from sales.
In the most recent quarter, ending June 30, 2024, the cash conversion cycle was 23.53 days, reflecting an improvement from the previous quarter. This suggests that Sonos Inc was able to manage its working capital more effectively, turning inventory and accounts receivable into cash at a quicker pace.
Looking back over the past few quarters, the cash conversion cycle was notably longer in the quarters ending Sep 30, 2023, and Jun 30, 2023, indicating potential challenges in converting inventory and receivables into cash during those periods.
On the contrary, the cash conversion cycle was negative in the quarters ending Mar 31, 2022, and Dec 31, 2021, suggesting that Sonos Inc was able to convert its investments into cash more quickly than the time it took to pay off its liabilities. While this may seem positive, it could also indicate aggressive management of payables that may not be sustainable in the long run.
Overall, a downward trend in the cash conversion cycle is generally favorable as it indicates improved liquidity and efficient management of working capital. However, it is essential for Sonos Inc to strike a balance between accelerating cash inflows and managing cash outflows to maintain a healthy cash conversion cycle in the long term.