TTM Technologies Inc (TTMI)

TTM Technologies Inc's liquidity ratios demonstrate the company's ability to meet its short-term obligations and manage its cash effectively over the past five years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has remained relatively stable over the period under review. The ratio peaked at 2.52 in 2021, indicating a strong ability to meet short-term obligations, before declining slightly to 2.03 in 2023. This suggests that TTM has a healthy level of current assets relative to its current liabilities, which is generally a positive sign for investors and creditors.

The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets. TTM's quick ratio has shown a similar trend to the current ratio, with a peak of 1.66 in 2021 and a current value of 1.23 in 2023. This suggests that the company has a satisfactory level of liquid assets to cover its short-term liabilities, although the ratio has decreased slightly over the past two years.

The cash ratio, which indicates the company's ability to cover its current liabilities with its cash and cash equivalents, has generally improved over the reviewed period. TTM's cash ratio has more than doubled since 2019, reaching 0.64 in 2023. This indicates that TTM has a strengthening ability to meet its short-term obligations using its readily available cash resources.

Overall, TTM Technologies Inc's liquidity ratios suggest that the company has maintained a solid financial position in terms of its ability to meet short-term obligations and manage its cash effectively.

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Additional liquidity measure

The cash conversion cycle for TTM Technologies Inc has shown fluctuations over the past five years, indicating changes in the efficiency of its cash management and working capital processes. In 2023, the cash conversion cycle increased to 13.64 days from the previous year's 4.32 days, signifying a longer time taken to convert investments in inventory and receivables into cash.

Compared to 2021 when the company had a negative cash conversion cycle of -8.73 days, indicating that TTM Technologies Inc was able to convert its inventories and receivables into cash more quickly than paying its payables. The negative cash conversion cycle suggests strong cash flow management and efficient working capital practices.

The negative trend continued in 2020 with a cash conversion cycle of -5.64 days, but in 2019, the company experienced a positive cash conversion cycle of 4.02 days. The positive cash conversion cycle in 2019 suggests that TTM Technologies Inc took longer to convert its investments in inventory and receivables into cash compared to the time it took to pay its payables.

Overall, fluctuations in the cash conversion cycle for TTM Technologies Inc indicate shifts in its working capital efficiency and cash management over the years, with negative cycles demonstrating better efficiency in cash conversion and positive cycles indicating a need for improvement in working capital management.