Western Digital Corporation (WDC)

Current ratio

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Total current assets	US$ in thousands	5,856,000	8,060,000	7,886,000	9,453,000	9,757,000
Total current liabilities	US$ in thousands	5,418,000	6,087,000	5,434,000	4,557,000	4,870,000
Current ratio		1.08	1.32	1.45	2.07	2.00

June 30, 2025 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $5,856,000K ÷ $5,418,000K
= 1.08

The current ratio of Western Digital Corporation has exhibited a declining trend over the analyzed period from June 30, 2021, to June 30, 2025. Specifically, the ratio was 2.00 as of June 30, 2021, indicating that current assets were twice the current liabilities, which generally suggests a strong liquidity position. By June 30, 2022, the current ratio had increased slightly to 2.07, reinforcing the perception of adequate short-term financial health during that year.

However, from June 30, 2022, onward, the current ratio experienced a notable decline. As of June 30, 2023, it decreased to 1.45, signaling a reduction in the company's ability to cover its current liabilities with current assets. This downward trajectory continued with the ratio dropping to 1.32 on June 30, 2024, and further to 1.08 by June 30, 2025.

The decreasing current ratio over this period suggests a weakening of Western Digital’s liquidity position. While ratios above 1 generally indicate that a company can meet its short-term obligations, the significant decline from above 2 to just over 1 indicates that the company's margin of safety has diminished, potentially exposing it to liquidity risks if short-term obligations increase or unforeseen financial stresses occur.

In summary, Western Digital’s current ratio has decreased steadily over the analyzed period, reflecting a gradual erosion of liquidity buffer. The trend warrants consideration of underlying causes such as changes in current assets or current liabilities and their impact on the company's short-term financial stability.