ConAgra Foods Inc (CAG)

The liquidity ratios of ConAgra Foods Inc over the specified periods reveal certain trends and insights regarding the company's short-term financial health.

Starting with the current ratio, which measures a company's ability to cover its short-term liabilities with its short-term assets, the data indicates fluctuations within a range of approximately 0.70 to 0.97. The ratio was relatively low at 0.78 in late August 2022, suggesting limited liquidity at that time. It increased gradually, reaching around 0.92 to 0.97 by late 2022 and early 2023, which signals improved liquidity and a greater capacity to meet current obligations. However, the ratio declined notably to 0.76 in mid-2023, which indicates reduced liquidity, before rebounding to approximately 0.91 to 0.97 by late 2023 and early 2024. The highest reported current ratio during this period approached 0.97, close to a healthy liquidity position, but the ratio subsequently decreased to 0.70 in late 2024 and further to around 0.69-0.71 by mid-2025, pointing to a potential concern regarding liquidity sufficiency.

The quick ratio, which excludes inventories and provides an even more conservative view of liquidity, generally remains below 0.30 throughout the period, with slight fluctuations. It was relatively stable around 0.21 to 0.27 from 2022 through early 2024, indicating that the company's most liquid assets (cash and receivables) constitute a small portion of current liabilities. A notable decline occurs in late 2024 and early 2025, where the quick ratio drops to approximately 0.19-0.20, underscoring a decreased capacity to cover short-term liabilities with the most liquid assets.

Conversely, the cash ratio, which assesses the ability to settle current liabilities with cash and cash equivalents, remains very low throughout the period, generally around 0.01 to 0.02. This denotes that the company holds limited cash reserves relative to its short-term liabilities, and this trend persists despite minor increases, such as the peak at 0.04 during late 2023.

Overall, the company's liquidity ratios suggest that ConAgra Foods Inc has maintained a modest liquidity position over this period. The current ratio generally indicates a manageable short-term liquidity buffer, though fluctuations could imply periods of tighter liquidity. The quick and cash ratios remaining low highlight reliance on less liquid current assets for meeting short-term obligations. The decline in these ratios towards late 2024 and mid-2025 warrants cautious monitoring, as sustained low liquidity ratios could pose risks to the company's ability to fulfill current liabilities without additional liquidity sources.

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Additional liquidity measure

The cash conversion cycle (CCC) of ConAgra Foods Inc. has exhibited notable fluctuations over the analyzed period. Starting from a relatively low point of approximately 38.34 days in August 2022, the cycle increased substantially, reaching a peak of around 62.09 days by August 2023. This upward trend indicates a lengthening of the time it takes the company to convert its investments in inventory and receivables into cash, potentially reflecting challenges in inventory management or receivables collection processes.

Subsequently, a discernible downward trend commenced, with the CCC declining to approximately 45.21 days by May 2024. This reduction suggests improvements in operational efficiencies, possibly through optimized inventory turnover or accelerated receivables collections. The most recent data from February to May 2025 indicates a further shortening of the cycle to around 43.63 days, signifying ongoing efforts to enhance cash conversion efficiency.

Overall, the company's cash conversion cycle experienced an initial increase, peaking in mid-2023, followed by a consistent decrease in subsequent periods. This trend underscores a potential strategic move to reduce the duration of working capital requirements and improve liquidity position. Nonetheless, the cyclical nature and variability highlight the importance of continuous monitoring of operational efficiencies related to inventory and receivables management.