ConAgra Foods Inc (CAG)

ConAgra Foods Inc's liquidity ratios show fluctuating trends over the past five years. The current ratio, which measures the company's ability to pay its short-term obligations with its current assets, has been inconsistent. It declined from 0.88 in 2020 to 0.76 in 2023 before slightly increasing to 0.97 in 2024.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibits variability. It decreased from 0.43 in 2020 to 0.24 in 2023 before slightly improving to 0.29 in 2024.

The cash ratio, which indicates the company's ability to cover its short-term obligations with cash and cash equivalents, remained low and relatively stable at 0.02 over the past five years, except for a significant drop to 0.02 in 2020.

Overall, ConAgra Foods Inc's liquidity ratios suggest challenges in managing short-term obligations efficiently, especially when considering the decline in quick and current ratios in recent years. The company may need to focus on improving its liquidity position to better weather unpredictable economic conditions and unforeseen financial challenges.

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Additional liquidity measure

The cash conversion cycle of ConAgra Foods Inc has shown some fluctuations over the past five years. In the most recent fiscal year ending on May 26, 2024, the company's cash conversion cycle was 44.89 days, indicating that it took the company approximately 44.89 days to convert its investments in inventory and other resources into cash.

Comparing this to the previous years, we see that in May 2023 and May 2022, the cash conversion cycle was 50.22 days and 31.84 days, respectively. This implies that in May 2023, the company took longer to convert its resources into cash compared to May 2024, whereas in May 2022, the conversion cycle was shorter.

Furthermore, looking at the data from May 2021 and May 2020, we observe that the cash conversion cycle continued to improve over these years, with 28.88 days in May 2021 and 24.71 days in May 2020. This suggests that the company was more efficient in managing its cash conversion process during those periods.

Overall, fluctuations in the cash conversion cycle can reflect changes in the company's operational efficiency, inventory management, and cash flow dynamics. It is essential for ConAgra Foods Inc to continue monitoring and optimizing its cash conversion cycle to ensure effective utilization of resources and improve overall financial performance.