Starbucks Corp. (NASDAQ:SBUX)

The liquidity position, as indicated by the current, quick, and cash ratios, exhibits fluctuating trends over the observed period. Generally, a declining trend in all three ratios is apparent from late 2021 through late 2023, followed by some recovery in early 2024, and then a renewed decline into the most recent period.

Current Ratio

The current ratio began at 1.06 in December 2020 and initially showed some improvement, peaking at 1.20 in October 2021. Subsequently, it experienced a consistent decline, reaching a low of 0.70 in December 2023. A partial recovery was noted in the first half of 2024, rising to 0.89 in June 2024, but this was followed by a decrease to 0.64 by December 2024 and a slight increase to 0.76 in June 2025. The most recent value, 1.05, represents the highest point since October 2021.

Quick Ratio

The quick ratio followed a similar pattern to the current ratio, starting at 0.78 in December 2020 and reaching 0.93 in October 2021. A more pronounced and consistent decline was observed, falling to a low of 0.40 in December 2024. A modest recovery occurred in the first half of 2025, reaching 0.52 in June 2025, but then decreased to 0.42 in the most recent period. The quick ratio consistently remained below 0.75 throughout most of the analyzed timeframe.

Cash Ratio

The cash ratio demonstrated the most significant decline of the three metrics. Beginning at 0.67 in December 2020, it decreased steadily, reaching a low of 0.29 in December 2024. While there were minor fluctuations, the ratio remained relatively low throughout the period, ending at 0.31 in the most recent observation. The cash ratio consistently indicates a limited ability to cover immediate liabilities with only cash and cash equivalents.

The concurrent declines in all three ratios suggest a potential weakening in the company’s short-term liquidity position. The recent slight improvements in the current and quick ratios, culminating in a more substantial increase in the current ratio in the latest period, may indicate a stabilization or partial recovery, but continued monitoring is warranted. The consistently low cash ratio remains a point of attention.

The current ratio exhibited fluctuations over the analyzed period, spanning from December 2020 to December 2025. Initially, the ratio remained relatively stable, hovering around 1.06 to 1.07 in the first three periods. A notable increase was observed in October 2021, reaching a peak of 1.20, before declining significantly in subsequent periods.

A consistent downward trend became apparent from January 2022 through October 2022, with the ratio decreasing from 0.81 to 0.77. This trend continued into the first half of 2023, reaching a low of 0.70 in January 2023. A partial recovery occurred in April 2023 and June 2023, with the ratio increasing to 0.86 and 0.89 respectively, but this improvement was not sustained.

Overall Trend

The overall trend indicates a weakening of the company’s short-term liquidity position over the majority of the observed period. While there were brief periods of improvement, the ratio generally declined from a high of 1.20 to a low of 0.64 in December 2024. A significant increase to 1.05 was observed in the final period, December 2025.

Period of Weakness (Jan 2022 - Dec 2024)

From January 2022 to December 2024, the current ratio consistently remained below 0.90, suggesting a potential strain on the company’s ability to meet its short-term obligations with its current assets. The lowest point during this period was 0.64, indicating a considerable liquidity challenge.

Recent Recovery (Dec 2025)

The substantial increase in the current ratio to 1.05 in December 2025 represents a significant improvement in short-term liquidity. This suggests a positive shift in the company’s financial position, potentially due to an increase in current assets, a decrease in current liabilities, or a combination of both.

The fluctuations in the current ratio warrant further investigation to understand the underlying drivers. Analyzing the components of current assets and current liabilities would provide a more detailed understanding of the factors contributing to these changes and the company’s overall liquidity management.

The quick ratio for the analyzed period demonstrates fluctuations, generally indicating a consistent, but often limited, ability to meet short-term obligations with the most liquid assets. An initial period of relative stability is followed by a decline, then a partial recovery, and ultimately a renewed downward trend.

Initial Period (Dec 27, 2020 - Oct 3, 2021)

The quick ratio begins at 0.78 and experiences a slight decrease to 0.75 before stabilizing at 0.75 for two consecutive quarters. It then increases to 0.93, representing the highest value observed within the analyzed timeframe. This initial period suggests a reasonably stable, though not exceptionally strong, short-term liquidity position.

Decline and Stabilization (Jan 2, 2022 - Oct 2, 2022)

A significant decline is observed, with the quick ratio falling from 0.57 in January 2022 to 0.48 in October 2022. This indicates a weakening ability to cover immediate liabilities with readily available assets. The ratio remains relatively stable around the 0.48-0.52 range for the subsequent three quarters.

Fluctuations and Recent Trend (Jan 1, 2023 - Sep 28, 2025)

The quick ratio exhibits further volatility. It increases to 0.56 and 0.59 in the first half of 2023, but then declines to 0.40 by December 2024. A subsequent increase to 0.52 is followed by a further decrease to 0.42 by September 2025. This recent trend suggests a potential deterioration in short-term liquidity, with the ratio consistently below the initial values observed in 2020 and 2021.

Throughout the period, the quick ratio consistently remains below 1.0, indicating that the company does not consistently hold enough liquid assets to cover its immediate liabilities. The fluctuations suggest sensitivity to changes in current liabilities and quick assets, warranting further investigation into the underlying drivers of these changes.

The most recent quarters show a concerning trend of declining liquidity, which may require attention to ensure the company maintains sufficient flexibility to meet its short-term obligations.

The cash ratio for the analyzed period demonstrates fluctuations, generally indicating a moderate ability to meet current liabilities with immediately available cash. An initial period of relative stability is followed by a notable increase and subsequent decline, with a recent period of renewed volatility.

Overall Trend

The cash ratio exhibits a generally decreasing trend over the observed timeframe, although punctuated by periods of improvement. The ratio begins at 0.67 and generally declines to 0.31 before showing some recovery to 0.40. This suggests a potential weakening in the company’s most liquid position relative to its short-term obligations, though recent quarters show some stabilization.

Initial Period (Dec 2020 – Oct 2021)

From December 2020 through October 2021, the cash ratio remained relatively stable, fluctuating between 0.62 and 0.81. This indicates a consistent, though not exceptionally strong, capacity to cover current liabilities with cash. The peak of 0.81 in October 2021 represents the strongest liquidity position within this timeframe.

Decline and Low Point (Jan 2022 – Sep 2025)

Beginning in January 2022, a consistent decline in the cash ratio is observed, reaching a low of 0.29 in March 2025. This period reflects a diminishing ability to cover short-term obligations with cash. The ratio falls below 0.40 for several consecutive quarters, indicating a potentially concerning trend. The decline coincides with increases in current liabilities.

Recent Fluctuations (Jun 2025 – Mar 2026)

The most recent quarters show increased volatility. The ratio rises to 0.40 in June 2025, then declines to 0.31 in September 2025, before recovering to 0.34 in March 2026. This suggests potential short-term adjustments in cash management or liability structure. The latest value, while improved from the low point, remains below the levels observed in the earlier part of the analyzed period.

In summary, while the company initially demonstrated a reasonable cash ratio, a prolonged period of decline suggests a weakening liquidity position. Recent fluctuations indicate potential efforts to address this, but continued monitoring is warranted to assess the sustainability of any improvements.