Cracker Barrel Old Country Store (CBRL)

Cracker Barrel Old Country Store's liquidity ratios show a declining trend over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has decreased from 1.43 in 2020 to 0.61 in 2024. This indicates a significant decrease in the company's short-term liquidity position, as it now only has $0.61 in current assets for every $1 of current liabilities.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also decreased from 1.08 in 2020 to 0.13 in 2024. This suggests that Cracker Barrel Old Country Store may face challenges in meeting its short-term obligations without relying on inventory to generate cash quickly.

Furthermore, the cash ratio, which focuses solely on cash and cash equivalents to current liabilities, has declined from 0.97 in 2020 to 0.03 in 2024. This indicates that the company's ability to pay off its current liabilities using only cash has significantly weakened over the years.

Overall, based on the declining current, quick, and cash ratios, it is evident that Cracker Barrel Old Country Store's liquidity position has weakened over the past five years, signaling potential challenges in meeting its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle of Cracker Barrel Old Country Store has shown fluctuations over the past five years. In the most recent fiscal year ending on August 2, 2024, the company's cash conversion cycle was 7.71 days, indicating that it took approximately 7.71 days for the company to convert its investments in inventory and other resources into cash from sales.

Compared to the previous year, there was an increase in the cash conversion cycle, showing a slight inefficiency in managing working capital. However, when looking at the trend over the past five years, there has been some variability in the company's efficiency in converting resources into cash.

In the fiscal year ending July 31, 2020, the cash conversion cycle was the highest at 13.76 days, indicating a longer period to convert resources into cash. This suggests potential operational challenges or inefficiencies during that period.

On the other hand, in the fiscal year ending July 29, 2022, the cash conversion cycle decreased to 10.35 days, reflecting improved efficiency in managing working capital.

Overall, monitoring the cash conversion cycle over time can provide valuable insights into a company's operational efficiency and working capital management practices.