lululemon athletica inc. (NASDAQ:LULU)

Current Ratio

The current ratio shows a general pattern of fluctuation within the analyzed periods. Starting at 2.33 in May 2019, it experienced a slight increase until February 2020, reaching a peak of 2.91. Subsequently, there was a notable decline in mid-2020, reaching lows around 1.86 to 1.99 during late 2021 and early 2022. From 2022 onward, the ratio gradually recovered, achieving values above 2.4 by mid-2023, before experiencing moderate decreases and increases. Overall, the company maintained a current ratio above 2 in most periods, indicating a stable liquidity position over time despite some volatility.

Quick Ratio

The quick ratio presents more pronounced volatility compared to the current ratio. It ranged from a low of 0.34 in October 2022 to a high of 1.83 in February 2020. Early in the series, there was an increase up to the February 2020 peak, followed by a sharp decline throughout 2020 and 2021, with values often falling below 1. The ratio showed improvement starting at the beginning of 2023, reaching values around 1.47 in mid-2024, before declining again in later periods. This pattern reflects variability in the company’s liquid assets relative to its current liabilities, signaling fluctuations in near-cash asset management and possibly inventory levels.

Cash Ratio

The cash ratio trend aligns closely with the quick ratio but with slightly smoother changes. Initially, the ratio was robust, peaking at 1.76 in February 2020 before encountering significant decreases through 2020 and into late 2022, reaching a low of 0.27 in October 2022. Subsequent quarters saw a recovery phase, with the ratio increasing to values above 1.3 in early to mid-2024. The ratio then declined moderately again toward the latest periods under review. These changes indicate shifts in the most liquid assets (cash and equivalents) held by the company against its current liabilities, with the company demonstrating periods of both strong and weaker cash liquidity.

The analysis of the quarterly financial data over the reported periods reveals notable trends in the liquidity position as reflected by current assets, current liabilities, and the current ratio.

Current Assets

The values for current assets exhibit an overall upward trend from May 2019 through May 2025, with fluctuations observed within intermediate quarters. Starting at approximately 1,171,584 thousand USD in May 2019, current assets increased to a peak above 4,060,577 thousand USD by January 2024. There is a discernible pattern of significant growth phases interspersed with periods of plateau or slight decline, such as between May 2024 and August 2025, where current assets decreased from around 3,980,302 thousand USD to approximately 3,528,728 thousand USD.

Current Liabilities

Current liabilities also increased over the timeline but displayed greater volatility. Beginning at 502,942 thousand USD in May 2019, liabilities rose substantially to a peak of 1,839,630 thousand USD in February 2025. The data shows periods of sharp increases, for example, between October 2021 and January 2022, where liabilities increased from around 1,118,020 thousand USD to 1,405,334 thousand USD. Following this, a fluctuating pattern persists with intermittent decreases and increases, signaling active management or adjustments in payable obligations.

Current Ratio

The current ratio, representing liquidity, fluctuated between a low of 1.86 and a high of 2.91 over the periods. The ratio was relatively strong in the early periods (above 2.3) before dipping to the lowest level near 1.86 in January 2022. This decline corresponds with the rise in current liabilities during that timeframe. After reaching this trough, the ratio improved again to values above 2.4 by April 2023, indicating enhanced ability to cover short-term obligations. A downward tendency occurred again after mid-2023, with the ratio stabilizing around 2.1 to 2.3 later in the timeline.

Overall, the data indicates steady growth in the company’s current assets with some volatility in current liabilities, which leads to moderately fluctuating but generally stable liquidity as measured by the current ratio. The company appears to maintain liquidity comfortably above a ratio of 1.8, suggesting adequate short-term financial health despite varying operating conditions over the analyzed quarters.

Total Quick Assets

The total quick assets exhibit significant fluctuations over the periods analyzed. Starting from approximately $596 million, there is an initial upward trend reaching a peak exceeding $1.2 billion around early 2021. This is followed by notable declines in mid-2022, dropping below $450 million, before rising again sharply to nearly $2.4 billion by early 2024. Towards the latter part of the timeline, the figure declines once more but remains above $1.2 billion. This pattern suggests variability in liquid assets availability, potentially influenced by seasonal factors, business cycles, or strategic asset management decisions.

Current Liabilities

Current liabilities show an overall increasing trend from just over $500 million in mid-2019 to a peak surpassing $1.8 billion by early 2025. The upward trajectory is relatively steady, with minor fluctuations but no sustained decreases, indicating growing short-term obligations for the company. This rise in liabilities may reflect expanded operations, increased payables, or other short-term financial commitments. The steadily increasing liabilities, especially when juxtaposed with fluctuating quick assets, could indicate varying pressure on liquidity over time.

Quick Ratio

The quick ratio mirrors the trends observed in quick assets relative to current liabilities, showing fluctuating liquidity strength across the periods. Initially, the ratio hovers above 1.0, indicating sufficient quick assets to cover current liabilities. A pronounced peak occurs early in 2020 at 1.83, followed by a sharp decline reaching lows near 0.34 and 0.48 in mid to late 2022, signaling potential liquidity stress during those periods. Subsequently, the ratio recovers above 1.0 in early to mid-2024, suggesting improved immediate liquidity. However, the ratio declines again towards the end of the timeframe, dipping below 1.0 in several instances, which may point to ongoing volatility in short-term financial stability.

Overall Insights

The financial data reflect a company experiencing considerable variability in its liquid asset base and short-term obligations over the examined quarters. The peaks and valleys in quick assets contrast with the relatively steady increase in current liabilities, resulting in fluctuating quick ratios. Periods of strong liquidity are interspersed with intervals indicating tighter short-term financial conditions. These patterns underscore the importance of careful management of liquid resources relative to liabilities to maintain operational stability and risk mitigation.

The financial data reveals several notable trends in liquidity and short-term financial management over the analyzed periods.

Total Cash Assets

The total cash assets exhibit significant fluctuations throughout the timeline. Starting from around $576 million (US$ thousands) in May 2019, the cash levels increased to a peak of approximately $1.18 billion by May 2021. This increase was followed by a pronounced decline to about $352 million in October 2022. Subsequently, the cash balance surged again, reaching a new high of approximately $2.24 billion in January 2024. After this peak, a declining trend is observed, with cash assets reducing to near $1.16 billion by August 2025. These swings suggest periods of both accumulation and drawdown of cash, possibly reflecting strategic liquidity management to meet operational or investment needs.

Current Liabilities

Current liabilities show a generally increasing trend over the period. Starting from approximately $503 million in May 2019, liabilities rose continuously, reaching over $1.4 billion by May 2022. A further increase is noted, peaking near $1.84 billion in February 2025. Following this peak, a minor reduction occurs but the overall level remains high at about $1.56 billion by August 2025. The growth in current liabilities indicates expanding short-term obligations, which may reflect increased operational scale or financing activities.

Cash Ratio

The cash ratio, measuring the ability to cover current liabilities with cash assets alone, displays considerable volatility. Initially, the ratio was around 1.15 in May 2019, indicating ample liquidity. It fluctuated around this level before experiencing a peak at 1.76 in February 2020, corresponding with a high cash balance relative to liabilities. Then, the ratio declined sharply, reaching a low of 0.27 by October 2022, signifying reduced liquidity relative to short-term obligations. Post-2022, the ratio partially recovered, peaking again near 1.38 in January 2024, coinciding with the peak in cash assets. However, the ratio declined again toward the later periods, ending at around 0.74 in August 2025, suggesting a more conservative cash position compared to liabilities.

Overall, these trends highlight dynamic liquidity management with cyclical cash accumulation and usage patterns. The increase in current liabilities alongside fluctuating cash holdings suggests the company may be balancing operational demands with financing strategies. Monitoring the declining trends in the cash ratio during some periods might be critical for assessing short-term financial risk and ensuring ongoing solvency.