Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Western Digital Corp., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-12-29), 10-Q (reporting date: 2023-09-29), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-30), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-K (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02), 10-Q (reporting date: 2021-01-01), 10-Q (reporting date: 2020-10-02), 10-K (reporting date: 2020-07-03), 10-Q (reporting date: 2020-04-03), 10-Q (reporting date: 2020-01-03), 10-Q (reporting date: 2019-10-04), 10-K (reporting date: 2019-06-28), 10-Q (reporting date: 2019-03-29), 10-Q (reporting date: 2018-12-28), 10-Q (reporting date: 2018-09-28).
- Current Ratio
- The current ratio demonstrates a generally declining trend over the observed periods. Initially, the ratio was strong at 2.41 but steadily decreased with some minor recoveries, reaching a low point of 1.31 before showing slight improvement to 1.67 by the last period. This indicates a weakening in the company’s short-term liquidity position, suggesting that the company's ability to cover its short-term liabilities with its current assets has diminished over time but has slightly stabilized recently.
- Quick Ratio
- The quick ratio mirrors the pattern observed in the current ratio with a consistent downward trajectory. Starting at 1.57, it declined to as low as 0.60, indicating a reduction in the company’s liquid assets relative to current liabilities over the analyzed time span. Although there is a small recovery towards the end, reaching 0.85, the continuing decrease suggests a tightening liquidity situation when excluding inventories from current assets.
- Cash Ratio
- The cash ratio shows a similar declining trend, falling from 1.06 to a trough of 0.35 before partially rebounding to 0.53 in the final quarter. This ratio, being a stringent measure of liquidity focusing solely on cash and cash equivalents against current liabilities, highlights a notable reduction in the company’s most liquid assets available to meet immediate obligations. The partial recovery at the end may suggest improved cash management or inflows during the latest period.
- Overall Liquidity Trends
- Across all three liquidity metrics—current, quick, and cash ratios—the company exhibits a consistent decrease over the period examined. This declining pattern indicates a gradual erosion in liquidity strength, potentially increasing financial risk related to meeting short-term obligations without resorting to asset liquidation or additional financing. The minor improvements observed in the most recent quarters could reflect initial stabilization efforts, yet overall liquidity remains lower than at the start of the timeline.
Current Ratio
Western Digital Corp., current ratio calculation (quarterly data)
| Dec 29, 2023 | Sep 29, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 30, 2022 | Sep 30, 2022 | Jul 1, 2022 | Apr 1, 2022 | Dec 31, 2021 | Oct 1, 2021 | Jul 2, 2021 | Apr 2, 2021 | Jan 1, 2021 | Oct 2, 2020 | Jul 3, 2020 | Apr 3, 2020 | Jan 3, 2020 | Oct 4, 2019 | Jun 28, 2019 | Mar 29, 2019 | Dec 28, 2018 | Sep 28, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Current ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Apple Inc. | |||||||||||||||||||||||||||||
| Arista Networks Inc. | |||||||||||||||||||||||||||||
| Cisco Systems Inc. | |||||||||||||||||||||||||||||
| Dell Technologies Inc. | |||||||||||||||||||||||||||||
| Super Micro Computer Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-12-29), 10-Q (reporting date: 2023-09-29), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-30), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-K (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02), 10-Q (reporting date: 2021-01-01), 10-Q (reporting date: 2020-10-02), 10-K (reporting date: 2020-07-03), 10-Q (reporting date: 2020-04-03), 10-Q (reporting date: 2020-01-03), 10-Q (reporting date: 2019-10-04), 10-K (reporting date: 2019-06-28), 10-Q (reporting date: 2019-03-29), 10-Q (reporting date: 2018-12-28), 10-Q (reporting date: 2018-09-28).
1 Q2 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets show a fluctuating trend over the observed periods. Beginning at $10,571 million, there is a steady decline through early 2019 reaching a low around the $8,477 million mark by mid-2019. Following this, there is a recovery and stabilization pattern with values oscillating around the $9,000 to $9,800 million range until early 2022. From 2022 onward, a gradual downward trend resumes, leading to the lowest values nearing $7,577 million by late 2023, indicating a reduction in liquidity or asset base available in the short term.
- Current Liabilities
- Current liabilities present a less volatile but upward trend despite some fluctuations. Starting near $4,385 million, there is a slight decline into early 2019, followed by an increase peaking around $5,792 million in late 2023. This increase suggests rising short-term obligations over the years. Some periods show minor reductions, but the overall trajectory is an increase in current liabilities, particularly pronounced from mid-2021 onwards.
- Current Ratio
- The current ratio exhibits a downward trend across the timeline, beginning from a strong liquidity position of 2.41 in late 2018 and gradually declining to near 1.67 by the end of 2023. Several fluctuations are evident, with brief periods of stability around the 2.0 mark until about the end of 2021, followed by a marked decrease approaching 1.31 in late 2023 before a slight recovery. This decline indicates that the company’s ability to cover short-term liabilities with current assets has weakened over time, which could signal increasing liquidity risk or deteriorating short-term financial health.
- Overall Analysis
- The combination of decreasing current assets, increasing current liabilities, and a declining current ratio points to tightening liquidity conditions. The company appears to be managing a rising level of short-term obligations while experiencing a reduction in readily available short-term assets. Although there are intermittent periods of asset recovery and ratio stabilization, the prevailing trend suggests caution regarding short-term financial stability. The decline in the current ratio below the critical threshold of 2.0, and nearing 1.3, could warrant closer monitoring and potential liquidity management actions.
Quick Ratio
Western Digital Corp., quick ratio calculation (quarterly data)
| Dec 29, 2023 | Sep 29, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 30, 2022 | Sep 30, 2022 | Jul 1, 2022 | Apr 1, 2022 | Dec 31, 2021 | Oct 1, 2021 | Jul 2, 2021 | Apr 2, 2021 | Jan 1, 2021 | Oct 2, 2020 | Jul 3, 2020 | Apr 3, 2020 | Jan 3, 2020 | Oct 4, 2019 | Jun 28, 2019 | Mar 29, 2019 | Dec 28, 2018 | Sep 28, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||||||||
| Accounts receivable, net | |||||||||||||||||||||||||||||
| Total quick assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Quick ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Apple Inc. | |||||||||||||||||||||||||||||
| Arista Networks Inc. | |||||||||||||||||||||||||||||
| Cisco Systems Inc. | |||||||||||||||||||||||||||||
| Dell Technologies Inc. | |||||||||||||||||||||||||||||
| Super Micro Computer Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-12-29), 10-Q (reporting date: 2023-09-29), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-30), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-K (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02), 10-Q (reporting date: 2021-01-01), 10-Q (reporting date: 2020-10-02), 10-K (reporting date: 2020-07-03), 10-Q (reporting date: 2020-04-03), 10-Q (reporting date: 2020-01-03), 10-Q (reporting date: 2019-10-04), 10-K (reporting date: 2019-06-28), 10-Q (reporting date: 2019-03-29), 10-Q (reporting date: 2018-12-28), 10-Q (reporting date: 2018-09-28).
1 Q2 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Trend in Total Quick Assets
- The total quick assets exhibited a general declining trend over the observed periods. Starting from 6,865 million USD, the figure steadily decreased with some fluctuations, reaching a low around 3,483 million USD at the end of 2023. Notably, there were temporary recoveries such as in mid-2021 and again in late 2023, but overall the trend points to a reduction in liquid assets capable of quickly being converted to cash.
- Current Liabilities Pattern
- Current liabilities showed variability over time but overall an increasing tendency. Initially, levels hovered around 4,385 million USD and fluctuated between roughly 4,000 and 5,500 million USD across periods. Peaks occurred in late 2022 and throughout 2023, with values rising to 5,792 million USD before settling just below 4,700 million USD in the final quarter. This growth in current obligations indicates rising short-term financial commitments.
- Quick Ratio Analysis
- The quick ratio began at a healthy 1.57, indicating strong liquidity relative to current liabilities. However, this ratio consistently declined over the timeline, declining below 1.0 by early 2022 and dropping to as low as 0.6 during 2023. The decline signals tightening liquidity and potentially greater challenges in meeting short-term liabilities without selling inventory. A slight improvement to 0.85 was recorded toward the end of 2023, yet it remains below the initial levels.
- Implications and Insights
- The combination of decreasing total quick assets and increasing current liabilities contributed to the deteriorating quick ratio. This suggests a weakening liquidity position, which could pose risks to short-term financial stability if the trend continues. The company's ability to cover current liabilities with quick assets has notably diminished, underscoring the importance of monitoring working capital efficiency and possibly adjusting financial strategies to improve liquid asset availability.
Cash Ratio
Western Digital Corp., cash ratio calculation (quarterly data)
| Dec 29, 2023 | Sep 29, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 30, 2022 | Sep 30, 2022 | Jul 1, 2022 | Apr 1, 2022 | Dec 31, 2021 | Oct 1, 2021 | Jul 2, 2021 | Apr 2, 2021 | Jan 1, 2021 | Oct 2, 2020 | Jul 3, 2020 | Apr 3, 2020 | Jan 3, 2020 | Oct 4, 2019 | Jun 28, 2019 | Mar 29, 2019 | Dec 28, 2018 | Sep 28, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| 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. | |||||||||||||||||||||||||||||
| Super Micro Computer Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-12-29), 10-Q (reporting date: 2023-09-29), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-30), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-K (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02), 10-Q (reporting date: 2021-01-01), 10-Q (reporting date: 2020-10-02), 10-K (reporting date: 2020-07-03), 10-Q (reporting date: 2020-04-03), 10-Q (reporting date: 2020-01-03), 10-Q (reporting date: 2019-10-04), 10-K (reporting date: 2019-06-28), 10-Q (reporting date: 2019-03-29), 10-Q (reporting date: 2018-12-28), 10-Q (reporting date: 2018-09-28).
1 Q2 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Cash Assets
- The level of total cash assets shows a general downward trend from September 2018 through the end of 2022, declining from approximately 4.6 billion to under 2 billion US dollars. There is some fluctuation observed, including occasional short-term increases, such as in early 2021 and late 2023, but overall the cash assets have diminished by nearly half over the observed period.
- Current Liabilities
- Current liabilities have fluctuated within a relatively stable range but with a slightly increasing tendency over the period. Initial values around 4.3 to 4.4 billion US dollars see minor ups and downs, but by the latter dates there is an increase seen toward 5.7 billion, signaling potential growth in short-term obligations or operational liabilities. Peaks around early and mid-2023 suggest a buildup in liabilities at those points.
- Cash Ratio
- The cash ratio, representing the coverage of current liabilities by cash assets, demonstrates a steady decline from above 1.0 in late 2018 to well below 0.5 in most of 2022 and 2023, indicating a weakening liquidity position in terms of cash readily available to meet liabilities. There is a slight recovery at the very end of the period in December 2023, moving up to 0.53, yet it remains substantially lower than initial values, suggesting increased liquidity risk.
- Overall Analysis
- The data reflects a deteriorating liquidity profile over the five-year span. Decreasing cash assets alongside rising or fluctuating current liabilities result in a declining cash ratio, which could raise concerns about the ability to cover obligations purely through cash on hand. This trend may necessitate attention to cash management, possibly exploring ways to boost liquid assets or manage liabilities more conservatively to maintain financial stability.