The Chefs Warehouse Inc (CHEF)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 23, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.04 | 1.85 | 1.85 | 1.92 | 1.89 | 2.06 | 2.14 | 2.29 | 2.54 | 2.50 | 2.07 | 2.26 | 2.39 | 2.48 | 2.50 | 3.07 | 3.43 | 3.25 | 3.54 | 3.23 |
| Quick ratio | 1.13 | 0.96 | 0.97 | 1.05 | 1.00 | 1.06 | 1.15 | 1.20 | 1.48 | 1.50 | 1.13 | 1.28 | 1.46 | 1.55 | 1.61 | 2.11 | 2.45 | 2.29 | 2.52 | 2.22 |
| Cash ratio | 0.27 | 0.12 | 0.10 | 0.12 | 0.13 | 0.09 | 0.18 | 0.30 | 0.56 | 0.61 | 0.22 | 0.41 | 0.58 | 0.73 | 0.84 | 1.35 | 1.64 | 1.54 | 1.66 | 1.27 |
The current ratio for The Chefs Warehouse Inc has shown a decreasing trend over the last few years, indicating a potential deterioration in the company's liquidity position. The ratio, which measures the company's ability to meet its short-term obligations with its current assets, decreased from 3.54 in June 2020 to 1.89 in December 2023, before slightly improving to 2.04 by the end of December 2024.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also experienced a declining trend. The ratio declined from 2.52 in June 2020 to 0.97 in June 2024, reflecting a significant reduction in the company's ability to quickly cover its current liabilities with its most liquid assets.
The cash ratio, which measures the company's ability to pay off current liabilities with its cash and cash equivalents, also exhibited a downward trajectory. The ratio dropped from 1.66 in June 2020 to 0.10 in June 2024, suggesting a declining ability to settle short-term obligations solely with cash reserves.
Overall, the decreasing current, quick, and cash ratios for The Chefs Warehouse Inc raise concerns about the company's liquidity position and its ability to meet its short-term financial obligations efficiently.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 23, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 40.21 | 46.14 | 44.29 | 43.92 | 45.10 | 50.31 | 50.95 | 50.31 | 48.99 | 39.87 | 41.04 | 37.38 | 41.88 | 45.12 | 45.89 | 46.99 | 44.39 | 38.07 | 39.97 | 44.19 |
The cash conversion cycle of The Chefs Warehouse Inc has shown some fluctuations over the periods analyzed. The cycle measures the time it takes for a company to convert its investment in inventory into cash received from customers.
Between March 31, 2020, and June 30, 2020, the cash conversion cycle decreased from 44.19 days to 39.97 days, indicating an improvement in the company's ability to manage its working capital efficiently. However, from September 30, 2020, to December 31, 2020, the cycle increased to 44.39 days, showing a potential delay in converting inventory into cash.
The cycle continued to fluctuate over the following quarters, with some periods showing improvements and others indicating possible inefficiencies in working capital management. Notably, there was a significant increase in the cash conversion cycle from March 31, 2023, to June 30, 2023, reaching 50.95 days, suggesting challenges in converting inventory into cash during that period.
Overall, The Chefs Warehouse Inc's cash conversion cycle has exhibited variability, with periods of both improvement and deterioration. Monitoring and managing this cycle effectively are crucial for optimizing cash flow and operational efficiency within the company.