ConAgra Foods Inc (CAG)

The liquidity ratios of ConAgra Foods Inc. over the specified periods indicate a nuanced view of the company's short-term financial health. The current ratio, which measures the company's ability to cover its current liabilities with its current assets, was consistently below 1.0 from May 2023 through May 2025, suggesting that the company generally maintained insufficient current assets to cover its short-term obligations during this timeframe. Notably, the current ratio increased from 0.76 in May 2023 to 0.97 by May 2024, approaching a more balanced position, but then declined to 0.71 by May 2025, indicating a weakening of liquidity.

The quick ratio, which refines the current ratio by excluding inventory and other less liquid assets, reflects similar trends. It was stable at 0.24 at the end of May 2023, increased slightly to 0.29 in May 2024, and then decreased to 0.19 in May 2025. The rise in the quick ratio in May 2024 suggests a marginal improvement in the company's ability to meet short-term liabilities with available liquid assets, but the subsequent decrease implies a reduction in this capacity, raising concerns about liquidity adequacy.

The cash ratio, representing the most conservative measure of liquidity by considering only cash and cash equivalents against current liabilities, remained consistent at 0.02 throughout all periods examined. This implies that cash holdings alone are negligible relative to current liabilities, emphasizing a reliance on other current assets or operational cash flow management rather than readily available cash reserves.

In summary, ConAgra Foods Inc. exhibits a pattern of liquidity that is generally below optimal levels, with some short-term improvements around mid-2024 followed by a decline by 2025. The ratios highlight a potential vulnerability in covering short-term obligations purely with liquid assets, and the consistently low cash ratio underscores limited immediate cash availability. These indicators suggest that the company may need to strengthen its liquidity position to ensure enhanced short-term financial stability.

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Additional liquidity measure

The data indicates that ConAgra Foods Inc's cash conversion cycle (CCC) has exhibited fluctuations over the specified periods, reflecting variations in the company's operational efficiency related to receivables, inventory management, and payables. As of May 28, 2023, the CCC was approximately 50.22 days, which later increased to 56.14 days by May 31, 2023. This suggests a period where the company took longer to convert its investments in inventory and receivables into cash, potentially due to extended collection periods or inventory holding durations.

Subsequently, there was a noticeable improvement by May 26, 2024, with the CCC decreasing to 44.89 days, indicating enhanced operational efficiency in managing receivables, inventories, or payables. However, this positive trend was partially reversed by May 31, 2024, when the cycle lengthened to 51.08 days, pointing to a temporary slowdown or operational inefficiency.

Further improvement is observed by May 31, 2025, with the CCC reducing to 43.63 days, suggesting ongoing enhancements in cash flow management and operational processes. Overall, the trend from 2023 through 2025 reflects a general movement toward shorter cash conversion cycles, which is typically viewed as favorable, signaling improved efficiency in converting operating assets into cash. Nonetheless, the cyclical fluctuations underline the importance of continued focus on receivables collection, inventory turnover, and payables management to sustain and further optimize the cash conversion cycle.