B&G Foods Inc (BGS)

Based on the provided data, B&G Foods Inc's liquidity ratios have shown consistent improvement over the years in terms of current ratio, quick ratio, and cash ratio.

1. Current Ratio: The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has shown an increasing trend from 3.00 in 2020 to 3.30 in 2024. This indicates that B&G Foods Inc has been able to maintain a healthy level of current assets relative to its current liabilities, providing a cushion for meeting short-term obligations.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Although there was a slight fluctuation, the quick ratio remained relatively stable ranging from 0.73 to 0.98 over the years. This suggests that the company has a solid ability to cover immediate liabilities with its most liquid assets.

3. Cash Ratio: The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has also shown a varying but generally stable trend from 0.14 in 2021 to 0.21 in 2020 and 2024. This indicates that B&G Foods Inc has been maintaining a reasonable level of cash reserves to meet its short-term obligations directly with cash on hand.

Overall, the liquidity ratios of B&G Foods Inc reflect a consistent and solid liquidity position over the years, with a healthy ability to cover short-term obligations. The improving current ratio, stable quick ratio, and increasing cash ratio suggest prudent liquidity management by the company.

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Additional liquidity measure

The cash conversion cycle of B&G Foods Inc has changed over the years, as seen in the data provided.

In December 31, 2020, the company had a cash conversion cycle of 106.69 days, indicating that it took approximately 106.69 days for the company to convert its investments in inventory into cash receipts from customers.

By December 31, 2021, the cash conversion cycle had increased to 120.81 days, suggesting a longer processing time for the company to convert its resources into cash.

The trend continued in December 31, 2022, with the cash conversion cycle extending to 132.11 days. This increase may imply challenges in managing inventory levels efficiently and converting sales into cash.

However, by December 31, 2023, there was a slight improvement in the cash conversion cycle, which decreased to 114.90 days. This reduction may indicate efforts to streamline operations and enhance cash flow efficiency.

Subsequently, the cash conversion cycle further decreased to 103.12 days by December 31, 2024, signifying a more effective conversion of inventory and receivables into cash.

Overall, the fluctuation in B&G Foods Inc's cash conversion cycle over the years highlights the company's management of working capital components and its effectiveness in generating cash from operational activities. The company's ability to optimize its cash conversion cycle can impact its liquidity, profitability, and overall financial performance.