Dell Technologies Inc. (NYSE:DELL)

Current Ratio Analysis

The current ratio exhibited moderate fluctuations over the observed periods, generally oscillating between 0.7 and 0.8. It began at 0.82 and experienced a slight decrease and stabilization around 0.77 to 0.80 through most periods. A mild declining trend is noticeable approaching the middle periods, reaching a low around 0.72 before recovering back to the mid-0.8 range toward the end. This pattern suggests a relatively stable liquidity position with occasional minor tightening in short-term asset coverage of current liabilities.

Quick Ratio Analysis

The quick ratio showed a more pronounced downward trend compared to the current ratio. Starting at 0.56, it declined progressively with some short upward adjustments, reaching a low near 0.4 in the latter periods. Toward the most recent quarters, there is a slight recovery reaching approximately 0.53. This indicates that the company’s most liquid assets (excluding inventory) relative to current liabilities have generally weakened over time, which could reflect either an increase in liabilities or a decrease in liquid assets.

Cash Ratio Analysis

The cash ratio shows the most substantial decline among the three liquidity measures during the timeline. Beginning at 0.24, it dropped fairly steadily to below 0.10 in several middle quarters, reflecting a significant reduction in cash and cash equivalents relative to current liabilities. Although some minor recoveries occur in the final periods, the ratio remains low around 0.15. This trend points to a notable tightening in immediate cash availability, which could potentially impact the company's ability to cover short-term obligations without relying on asset conversion or financing.

Overall Liquidity Insights

The general trend across liquidity ratios indicates a gradual weakening in the company’s ability to meet short-term liabilities with liquid assets over the examined quarters. While the current ratio remains somewhat stable, the declines in quick and cash ratios suggest increasing dependence on less liquid current assets or a rise in current liabilities. The recovery noted in the most recent quarters may reflect management actions to improve liquidity, but overall, there is evidence of tighter liquidity conditions during the majority of the reported periods.

The analysis of the quarterly financial data reveals notable trends in liquidity and working capital management over the examined periods.

Current Assets

Current assets demonstrate variability throughout the quarters, with values fluctuating between approximately $34.6 billion and $57.2 billion. The highest point is observed around late 2021 with a significant peak, suggesting a temporary increase in assets such as cash, receivables, or inventory. Following this peak, there is a general tendency for current assets to decline into early 2024, reaching a low in the $34.6 billion range. However, from mid-2024 onwards, current assets show a moderate recovery, closing above $45 billion by the last reported quarter.

Current Liabilities

Current liabilities exhibit an overall upward movement with some fluctuations. The values rise from around $50 billion to a peak near $69.7 billion in late 2021, coinciding with the current assets peak. After this peak, liabilities decrease briefly but remain elevated, fluctuating between approximately $46.5 billion and $54.8 billion through 2023 and into 2024. Towards the latest quarters, the liabilities show an increasing trend again, nearing $54.9 billion.

Current Ratio

The current ratio, representing the ability to cover short-term obligations with current assets, consistently remains below 1.0, indicating a potential liquidity concern where current liabilities exceed current assets. The ratio fluctuates in a narrow range from about 0.72 to 0.85. The highest ratios appear around mid-2020 and late 2025, reflecting the periods with relatively better liquidity positions. Importantly, after a low phase near 0.72 in late 2023 and early 2024, there is an improving trend in the ratio, reaching up to 0.85 by late 2025. This improvement suggests efforts or circumstances leading to enhanced short-term financial stability.

In summary, the data indicates a cyclical pattern in current assets and liabilities with a significant peak in late 2021. The firm's liquidity position, as measured by the current ratio, consistently remains below the ideal threshold of 1.0, but shows signs of gradual improvement towards the end of the period. This pattern may reflect operational or financial management strategies to optimize working capital amidst varying market conditions. Close monitoring of the current ratio and underlying assets and liabilities remains critical to ensure sufficient liquidity.

The financial data over the observed periods reveals several notable trends regarding liquidity and short-term financial health.

Total Quick Assets

Total quick assets exhibit significant variability during the timeline. Starting at approximately 27.8 billion USD, they peaked notably in October 2021 at around 41.6 billion USD, before generally declining in subsequent quarters. The lowest point appears near May 2024 with quick assets dropping to about 19.1 billion USD. After this, a moderate recovery trend is seen, rising again to nearly 29.1 billion USD by August 2025. The fluctuations suggest periods of asset reallocation or shifts in liquid asset management strategies.

Current Liabilities

Current liabilities follow a somewhat less volatile yet elevated path compared to quick assets. Starting from around 50 billion USD, liabilities reached a peak near 69.7 billion USD in October 2021, coinciding with the peak in quick assets. Afterward, liabilities mostly declined, reaching a low point of approximately 46.5 billion USD by August 2025 but rose again to near 54.9 billion USD at the same endpoint. The pattern indicates ongoing adjustments in short-term obligations and possibly working capital management.

Quick Ratio

The quick ratio, which measures the firm's ability to cover its current liabilities with its most liquid assets, started below unity throughout all periods, indicating quick assets are consistently less than current liabilities. It fluctuates between a low of approximately 0.40 in early 2024 and a peak of 0.60 in October 2021. The ratio generally declines after its peak, falling into a narrower range around 0.40 to 0.53 in later periods. This persistent sub-unity ratio suggests constrained liquidity, with the firm potentially relying on other forms of financing or assets to meet short-term obligations.

In summary, the company demonstrated fluctuating liquidity levels across the quarters, with a notable peak in both quick assets and liabilities in late 2021 followed by a period of general decline. The quick ratio remained consistently below 1.0, implying a reliance on other current asset components beyond quick assets or alternative liquidity sources to manage short-term liabilities. The trends underscore the importance of monitoring the balance between liquid assets and obligations to maintain financial stability.

The analysis of the quarterly financial data reveals several notable trends in liquidity and short-term financial health metrics over the periods examined.

Total Cash Assets

Total cash assets exhibit significant fluctuations throughout the timeline. Starting at approximately 12.2 billion USD, the balance shows an initial decline to around 11.2 billion USD in mid-2020 before rising sharply to a peak of approximately 22.4 billion USD by late 2021. Following this peak, a marked downtrend is observed, with cash assets steadily decreasing to about 4.9 billion USD by late 2022. Subsequently, a partial recovery occurs, with cash assets fluctuating between 4.5 billion and 8.3 billion USD in the most recent quarters, suggesting some volatility but an overall reduced cash position compared to earlier peaks.

Current Liabilities

Current liabilities demonstrate variability but remain generally elevated throughout the period. Starting at about 50.0 billion USD in early 2020, current liabilities increase to roughly 69.7 billion USD by late 2021, coinciding with the peak in cash assets. After this high point, liabilities show a moderate declining trend, stabilizing between approximately 46.5 billion and 54.8 billion USD in the subsequent quarters. The data suggest an ongoing management of short-term obligations, with liabilities maintaining a substantial level relative to cash assets.

Cash Ratio

The cash ratio, which measures the company's ability to cover current liabilities with cash and cash equivalents, reflects the movements in cash and liabilities. Beginning at 0.24, the ratio declines to a low of about 0.09 by late 2022, indicating a reduced liquidity buffer during that period. Post-2022, the cash ratio stabilizes around 0.15, reflecting a slight improvement in liquidity but still underscoring a relatively limited capacity to meet short-term liabilities solely with cash. The ratio's general downward trend over time points to increasing reliance on other current assets or financing methods to manage short-term obligations.

Overall, the data suggest that while the company has experienced periods of strong cash holdings, these levels have not been consistently maintained. Current liabilities have generally remained high, which, coupled with the declining cash ratio, indicates potential liquidity management challenges. The modest rebound in cash assets and stabilization of the cash ratio in the recent quarters may reflect efforts to improve liquidity position, though the ratio remains below ideal thresholds for conservative liquidity management. Continued monitoring of cash flows and liabilities will be critical to ensure the company's short-term financial stability.