Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2007
- Total Asset Turnover since 2007
- Analysis of Debt
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Liquidity Ratios (Summary)
Super Micro Computer Inc., liquidity ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Current ratio | |||||||
| Quick ratio | |||||||
| Cash ratio |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
- Current Ratio
- The current ratio exhibits a generally declining trend from 2.35 in 2019 to a low of 1.91 in 2022, indicating a gradual reduction in short-term liquidity over this period. However, a notable recovery occurs in the subsequent years, with the ratio rising to 2.31 in 2023 and sharply increasing to 3.81 by 2024, demonstrating a significant improvement in the company's ability to cover its current liabilities with current assets.
- Quick Ratio
- The quick ratio shows a consistent downward trajectory from 1.06 in 2019 to 0.72 in 2021, suggesting a weakening in the company's immediate liquidity position excluding inventories. It stabilizes slightly at 0.75 in 2022, followed by a marked growth to 1.16 in 2023 and reaching 1.88 in 2024, reflecting enhanced liquidity excluding less liquid current assets.
- Cash Ratio
- The cash ratio declines steadily from 0.41 in 2019 to a bottom of 0.18 in 2022, indicating reduced cash and cash equivalents relative to current liabilities and potentially tighter immediate cash availability. From 2022 onward, it increases substantially, registering 0.32 in 2023 and more than doubling to 0.71 in 2024, which signifies a considerable strengthening in the company's most liquid asset position.
- Summary
- Overall, the company demonstrates a weakening liquidity trend in the initial years through 2022 across all three liquidity measures. This is followed by a pronounced improvement in liquidity ratios in the last two years, suggesting strategic or operational changes that enhanced the firm's ability to meet short-term obligations. The marked increase in the current, quick, and cash ratios by 2024 signals a stronger liquidity buffer, potentially reducing short-term financial risk.
Current Ratio
Super Micro Computer Inc., current ratio calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current assets | |||||||
| Current liabilities | |||||||
| Liquidity Ratio | |||||||
| Current ratio1 | |||||||
| Benchmarks | |||||||
| Current Ratio, Competitors2 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Current Ratio, Sector | |||||||
| Technology Hardware & Equipment | |||||||
| Current Ratio, Industry | |||||||
| Information Technology | |||||||
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- There has been a consistent upward trend in current assets from June 2019 through June 2024. The value increased steadily from approximately $1.42 billion in 2019 to $3.18 billion in 2023, followed by a significant surge to nearly $8.93 billion in 2024. This sharp increase in the final year represents a notable expansion in liquid or short-term resources available to the company.
- Current Liabilities
- Current liabilities exhibited growth over the examined period as well, though the trend is less linear compared to current assets. Starting at around $606 million in 2019, liabilities rose steadily to a peak of approximately $1.47 billion in 2022, slightly decreased to $1.37 billion in 2023, and then sharply increased again to about $2.35 billion in 2024. This indicates that while obligations have grown, there has been some fluctuation prior to the pronounced increase in the latest year.
- Current Ratio
- The current ratio, an indicator of short-term liquidity, declined from 2.35 in 2019 to a low of 1.91 in 2022, suggesting a gradual reduction in liquidity relative to current liabilities during those years. However, it reversed this trend by rising to 2.31 in 2023 and then markedly increased to 3.81 in 2024. The 2024 ratio represents a strong liquidity position, likely driven by the disproportionate growth in current assets relative to liabilities.
- Summary Insights
- The data reveals that the company has substantially increased both its current assets and current liabilities over six years, with particularly dramatic growth in 2024. Despite the growth in liabilities, assets have outpaced them, improving the current ratio significantly in the final year. This enhanced liquidity position may provide the company with greater flexibility to meet short-term obligations and pursue operational opportunities.
Quick Ratio
Super Micro Computer Inc., quick ratio calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Cash and cash equivalents | |||||||
| Accounts receivable, net of allowance for credit losses | |||||||
| Total quick assets | |||||||
| Current liabilities | |||||||
| Liquidity Ratio | |||||||
| Quick ratio1 | |||||||
| Benchmarks | |||||||
| Quick Ratio, Competitors2 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Quick Ratio, Sector | |||||||
| Technology Hardware & Equipment | |||||||
| Quick Ratio, Industry | |||||||
| Information Technology | |||||||
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets exhibit an overall increasing trend from 2019 to 2024. Starting at approximately 642 million US dollars in 2019, the figure dipped slightly in 2020 but then showed consistent growth each subsequent year. Notably, the most significant increase occurred between 2023 and 2024, where total quick assets nearly tripled from around 1.59 billion to approximately 4.41 billion US dollars.
- Current liabilities
- Current liabilities generally increased over the same period, starting from about 606 million US dollars in 2019 and rising steadily each year to reach approximately 2.35 billion in 2024. A notable peak occurred in 2022 with liabilities at roughly 1.47 billion, which slightly decreased in 2023 before rising again in 2024.
- Quick ratio
- The quick ratio started above 1.0 in 2019 at 1.06, indicating liquidity slightly above the standard benchmark. It then declined over the next two years, reaching a low of 0.72 in 2021. This was followed by a moderate recovery in 2022 and a more substantial improvement in 2023 to 1.16, surpassing the initial level in 2019. The most significant improvement occurred in 2024, with the ratio climbing to 1.88, reflecting a strong liquidity position.
- Insights
- The trend in total quick assets outpaced the growth in current liabilities, especially in the last two years, which positively influenced the quick ratio. The sharp increase in quick assets in 2024, combined with a less pronounced rise in current liabilities, resulted in the highest quick ratio observed during the period. This suggests enhanced short-term financial stability and improved ability to cover current liabilities without relying on inventory sales. The fluctuations in earlier years show periods of tightening liquidity, but recent years demonstrate improved financial management or asset accumulation contributing to greater liquidity.
Cash Ratio
Super Micro Computer Inc., cash ratio calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Cash and cash equivalents | |||||||
| Total cash assets | |||||||
| Current liabilities | |||||||
| Liquidity Ratio | |||||||
| Cash ratio1 | |||||||
| Benchmarks | |||||||
| Cash Ratio, Competitors2 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Cash Ratio, Sector | |||||||
| Technology Hardware & Equipment | |||||||
| Cash Ratio, Industry | |||||||
| Information Technology | |||||||
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets demonstrated fluctuations over the observed periods, starting at 248,164 thousand US dollars in mid-2019. There was a decline in 2020 to approximately 210,533 thousand, followed by a moderate increase in 2021 and 2022, reaching around 267,397 thousand. A significant rise occurred in 2023 to 440,459 thousand, culminating in a substantial surge in 2024 to 1,669,766 thousand. This reflects a strong upward trend in liquidity reserves in the most recent period.
- Current Liabilities
- Current liabilities showed a consistently increasing pattern across the years. Beginning at 605,969 thousand in 2019, liabilities rose steadily each year to 707,635 thousand in 2020, nearly 969,000 thousand in 2021, and over 1.47 million in 2022. Although there was a slight decrease in 2023 to approximately 1.37 million, liabilities increased again in 2024 to 2.35 million. Overall, this indicates growing short-term obligations with some variability.
- Cash Ratio
- The cash ratio revealed a declining trend from 0.41 in 2019 to a low of 0.18 in 2022, indicating a decreasing coverage of current liabilities by cash assets during this period. In 2023, there was a recovery to 0.32, and a significant improvement to 0.71 in 2024. This suggests that despite rising current liabilities, the liquidity position relative to liabilities strengthened considerably in the final year examined.
- Summary
- Overall, the financial data indicates an initial decrease in liquidity as cash assets dropped and liabilities increased from 2019 to 2022, with the cash ratio falling below 0.20 in 2022. However, a marked recovery is evident in 2023 and especially in 2024, with cash assets growing substantially and the cash ratio more than doubling relative to the low point. Although current liabilities continued to rise, the company's liquidity position improved significantly, suggesting enhanced capacity to meet short-term obligations at the end of the period studied.