Cal-Maine Foods Inc (CALM)

Based on the data provided for Cal-Maine Foods Inc, the liquidity ratios have shown fluctuations over the past five years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has ranged from a high of 6.16 in Jun 3, 2023, to a low of 3.58 in May 28, 2022. The current ratio has generally been above 5 in recent years, indicating that Cal-Maine Foods Inc has had a strong ability to meet its short-term obligations with its current assets.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. Cal-Maine Foods Inc's quick ratio has varied between 2.13 in May 28, 2022, and 4.57 in Jun 3, 2023. Similar to the current ratio, the quick ratio has generally been above 3 in the past five years, indicating the company's ability to meet its short-term obligations without relying on selling inventory.

The cash ratio, which is the most conservative liquidity ratio, focuses solely on the company's ability to pay off its current liabilities with its readily available cash and cash equivalents. Cal-Maine Foods Inc's cash ratio has fluctuated between 0.94 in May 28, 2022, and 3.57 in Jun 1, 2024. While the cash ratio has shown some variability, it has remained above 1 in recent years, suggesting that the company has sufficient cash on hand to cover its short-term liabilities.

Overall, Cal-Maine Foods Inc has demonstrated strong liquidity positions based on the current, quick, and cash ratios, indicating the company's ability to meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Cal-Maine Foods Inc has shown fluctuations over the past five years. In the most recent period ending June 1, 2024, the cash conversion cycle decreased to 59.15 days compared to the previous year's 55.45 days. This indicates that the company took slightly longer to convert its investments in inventory and accounts receivable into cash during the latest period.

However, when compared to the data from May 28, 2022, and May 29, 2021, where the cash conversion cycle was significantly higher at 85.26 days and 78.25 days respectively, the current period's figure represents an improvement in efficiency.

In contrast, the cash conversion cycle was lower in the periods ending May 30, 2020, compared to the most recent period. This suggests that the company was more efficient in converting its investments into cash in the earlier years.

Overall, while the recent increase in the cash conversion cycle may raise some concerns, it is essential to consider the company's historical performance and industry benchmarks to assess its efficiency in managing working capital effectively.