Synaptics Incorporated (SYNA)

The liquidity ratios of Synaptics Incorporated over the period from June 30, 2021, to June 30, 2025, demonstrate a pattern of significant improvement followed by a gradual decline.

The current ratio, which assesses a company's ability to meet short-term obligations using total current assets relative to current liabilities, increased markedly from 1.50 in June 2021 to a peak of 4.89 in June 2023. This substantial rise suggests a strong liquidity position and an increased buffer of current assets relative to current liabilities during this period. However, subsequent data reveals a slight decline to 4.19 in June 2024 and further to 2.78 in June 2025, indicating a reduction in liquidity margins, although levels still remain comfortably above the critical threshold of 1.0.

The quick ratio, which refines the current ratio by excluding inventories from current assets, mirrors the trend observed in the current ratio. It increased from 1.35 in June 2021 to an all-time high of 4.23 in June 2023. This indicates that excluding inventory, the company's ability to cover short-term liabilities improved considerably, reflecting a solid position in liquid assets such as receivables and cash. Similar to the current ratio, the quick ratio declines afterward to 3.82 in June 2024 and 2.15 in June 2025, but continues to denote a healthy liquidity stance.

The cash ratio, which is the most conservative liquidity indicator focusing solely on cash and cash equivalents relative to current liabilities, exhibited an impressive rise from 1.06 in June 2021 to 3.59 in June 2023. This indicates that the company held cash reserves well in excess of its short-term obligations during this period. Thereafter, the ratio decreased to 3.30 in June 2024 and further to 1.67 in June 2025, reflecting a reduction in readily available cash relative to current liabilities but still representing a comfortable liquidity cushion.

Overall, Synaptics Incorporated experienced a period of strong liquidity enhancements culminating around June 2023, followed by a normalization or slight decline in liquidity ratios by June 2024 and June 2025. Despite this decrease, the ratios remain at levels indicative of a financially stable company capable of meeting its short-term obligations with a reasonable margin of safety.

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Additional liquidity measure

The cash conversion cycle (CCC) of Synaptics Incorporated has exhibited notable fluctuations over the observed period from June 30, 2021, to June 30, 2025. Specifically, on June 30, 2021, the CCC stood at approximately 54.39 days. This figure increased significantly by June 30, 2022, reaching approximately 80.61 days, indicating a lengthening of the cycle. The upward trend persisted into June 30, 2023, with the CCC extending further to approximately 96.69 days, suggesting a peak in the cycle length. Subsequently, a reduction was observed in the following year, with the CCC decreasing to approximately 73.25 days as of June 30, 2024. Continuing this downward trend, the cycle further contracted to approximately 69.47 days by June 30, 2025.

This progression reflects a period of increasing efficiency challenges or shifts in operational or financial strategies up to mid-2023, followed by a trend of improvement in cash conversion efficiency thereafter. The fluctuations may be attributable to changes in inventory turnover, accounts receivable collection periods, or accounts payable deferral practices, impacting the overall liquidity management and working capital cycle. The reduction in the CCC approaching 2025 suggests a potential move towards heightened operational efficiency or improved management of receivables and payables.