Starbucks Corp. (NASDAQ:SBUX)

The financial ratios indicate the liquidity position of the company over multiple quarters from December 2020 through September 2025.

Current Ratio

The current ratio started at 1.06 in December 2020 and experienced minor fluctuations in early 2021, peaking at 1.20 in the quarter ending October 3, 2021. Subsequently, there was a notable decline to below 0.80 by early 2022, where it mostly remained. The ratio stabilized around 0.75 to 0.78 for several quarters but showed some volatility afterward, with values ranging from 0.64 to 0.89. Overall, the current ratio demonstrates a downward trend with temporary recoveries, indicating a weakening in the company's short-term liquidity over the period.

Quick Ratio

The quick ratio followed a similar pattern to the current ratio but consistently showed lower values, commensurate with the exclusion of inventory from current assets. After starting at 0.78, the ratio declined to a low of 0.48 by early 2022 and remained relatively flat with slight increases and decreases afterward. The lowest values were observed around 0.40 in the quarters ending March 2025 and again in September 2025. This trend suggests a tightening liquidity position when considering only the most liquid assets.

Cash Ratio

The cash ratio, reflecting the most conservative liquidity measure, started at 0.67 and saw an increase to 0.81 in late 2021. Post that peak, it experienced a gradual and persistent decline, reaching as low as 0.29 in March 2025. Following the low, some modest improvements occurred, but the ratio did not recover to earlier levels. This downward trend indicates a decreasing availability of cash and cash equivalents relative to current liabilities.

In summary, all three liquidity ratios indicate a weakening trend in the company’s ability to meet short-term obligations with liquid assets over the analyzed period. The peak liquidity observed in late 2021 was followed by sustained declines through 2025, suggesting increased financial pressure or changes in working capital management. The relative stability of the ratios in some quarters is overshadowed by the overall downward trajectory, warranting further attention from management to ensure adequate liquidity levels are maintained.

The analysis of the quarterly financial data reveals notable fluctuations and trends in the company's liquidity position, particularly as reflected by current assets, current liabilities, and the current ratio over the span from late 2020 to late 2025.

Current Assets

The level of current assets exhibits variability throughout the periods. Initially, there is a decline from 8,357,500 thousand USD in December 2020 to 6,975,500 thousand USD in March 2021, followed by a recovery and a peak at 9,756,400 thousand USD in October 2021. Subsequently, the assets generally stabilize between approximately 6.5 million and 7.3 million thousand USD through 2023, with a slight dip noted at the end of 2023. In 2024 and 2025, the figure shows moderate fluctuations, peaking again at 8,421,500 thousand USD in June 2025 before a reduction towards September 2025.

Current Liabilities

Current liabilities demonstrate a generally upward trend over the observed periods. Starting at 7,883,900 thousand USD in December 2020, liabilities increase progressively, reaching over 11 million thousand USD by mid-2025. Notable increments are observed in the periods covering late 2024 and early to mid-2025, indicating higher short-term obligations.

Current Ratio

The current ratio, indicative of the company's short-term liquidity, fluctuates significantly. Early observations show a ratio above 1.0, suggesting adequate coverage of current liabilities with current assets. However, starting in early 2022, the ratio consistently falls below 1.0, often ranging between approximately 0.64 and 0.89. This consistent decline below 1.0 signals a potential concern regarding the company's ability to cover short-term liabilities with existing liquid assets. The lowest value recorded is 0.64 in March 2025, underscoring increased liquidity pressure during this period.

In summary, while current assets show some recovery and variability, current liabilities steadily rise, exerting pressure on the liquidity position as reflected in the declining current ratio. The persistent sub-1.0 current ratio over multiple quarters warrants attention as it may indicate tightening liquidity conditions or increased reliance on short-term financing. Strategic measures may be necessary to enhance working capital management to ensure sustainable operational stability.

Quick Assets Trend

The total quick assets displayed notable fluctuations over the observed periods. Initially, there was a decrease from approximately 6.15 billion US dollars to 4.88 billion by the end of the first quarter in 2021. This was followed by a significant rise to around 7.56 billion in the fourth quarter of 2021. Afterward, a general downward trend was seen, with quick assets declining to the range of 4.35 to 4.76 billion in most quarters of 2022 and 2023, displaying some volatility. Toward the end of the timeline, the quick assets increased again, peaking at about 5.74 billion in the second quarter of 2025, but then fell back to approximately 4.74 billion by the third quarter of 2025.

Current Liabilities Trend

Current liabilities generally exhibited an upward trajectory throughout the period. Starting near 7.88 billion US dollars, liabilities dropped in early 2021 but then rose steadily, exceeding 9 billion by early 2022. From there, current liabilities continued to increase, ultimately surpassing 11 billion by mid-2025. This consistent rise suggests a growing short-term obligation over time, with some minor fluctuations but an overall increasing pattern.

Quick Ratio Analysis

The quick ratio, representing the company's short-term liquidity, showed a decreasing tendency over the timeline. It started at 0.78 and dipped below 0.5 in several quarters, notably hitting lows around 0.4 to 0.48 between late 2022 and early 2023. Despite minor recoveries later, the ratio remained generally below 0.6 in most quarters after 2021, indicating a weakening ability to cover current liabilities with quick assets. The lowest points aligned with periods of lower quick assets and rising current liabilities, reflecting potential liquidity pressures.

Overall Insights

The data indicates an environment of increasing current liabilities accompanied by fluctuating but generally stagnant quick assets, leading to a declining quick ratio over time. This pattern points to deteriorating short-term liquidity and possibly higher financial risk related to meeting immediate obligations. The periods of improved quick assets did not sufficiently offset the growing liabilities to restore strong liquidity, as shown by the persistent downward trend in the quick ratio.

Total Cash Assets

The total cash assets exhibit fluctuations over the given periods without a clear directional trend. Starting at 5,263,600 thousand USD, the value decreased to 4,003,700 thousand USD after the first quarter, then rose again reaching a peak of 6,617,900 thousand USD in October 2021. Following this peak, the cash assets generally declined with minor variations, hitting lower levels around early 2023. Subsequent quarters demonstrate modest recovery and then some volatility, with the cash balance falling as low as approximately 3,011,600 thousand USD in the March 2025 quarter before increasing again. Overall, cash assets show cyclical movement with notable peaks and troughs but lack sustained growth or decline.

Current Liabilities

Current liabilities show an overall upward trajectory throughout the periods analyzed. Beginning at 7,883,900 thousand USD, liabilities decline slightly in the early quarters but begin to increase consistently from early 2022 onward. The figures gradually increase, surpassing 10,000,000 thousand USD by the March 2025 quarter. This general increase in liabilities suggests growing short-term obligations, which indicate either increased operational activities or higher borrowing/debt levels.

Cash Ratio

The cash ratio, which measures the ability to cover current liabilities with cash assets, displays a declining trend initially, reflecting decreased liquidity relative to liabilities. It starts at 0.67, drops to a low of 0.29 in March 2025, and shows some minor recoveries and declines afterward. The lowest points correspond with periods when cash assets decreased while current liabilities rose. Although occasional increases in the ratio occur, the overall pattern indicates a weakening short-term liquidity position over the time frame analyzed.

Summary of Financial Trends

In summary, the data indicate that cash assets do not exhibit sustained growth and are somewhat volatile, whereas current liabilities increase steadily over the period, leading to pressure on liquidity as evidenced by the declining cash ratio. The firm’s capacity to cover short-term obligations strictly from its cash holdings has diminished, signaling a potential rise in financial risk if current liabilities continue to grow faster than cash reserves. This trend warrants careful monitoring and possibly strategic actions to ensure adequate liquidity levels going forward.