Campbell Soup Company Common Stock (CPB)

Campbell Soup Company's liquidity ratios have shown fluctuations over the past five years, indicating varying levels of short-term financial health. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has experienced significant changes. In the most recent fiscal year (2024), the current ratio dropped to 0.61 from 0.93 in the previous year, signaling potential difficulties in meeting its current liabilities.

Similarly, the quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, reflects a downward trend. The quick ratio decreased from 0.32 in 2023 to 0.21 in 2024, suggesting a reduced ability to meet short-term obligations without relying on inventory.

Additionally, the cash ratio, a stringent indicator of liquidity that focuses solely on cash and cash equivalents, has also decreased in the latest fiscal year. The cash ratio dropped to 0.03 in 2024 from 0.09 in 2023, indicating that Campbell Soup Company may have limited cash reserves available to cover immediate liabilities.

Overall, Campbell Soup Company's liquidity ratios suggest a potential strain on its short-term financial capabilities in the most recent fiscal year, as evidenced by the declines in the current ratio, quick ratio, and cash ratio. Investors and stakeholders may need to closely monitor the company's liquidity position and management strategies to ensure its ability to meet financial obligations in the near term.

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Additional liquidity measure

The cash conversion cycle of Campbell Soup Company Common Stock has shown an increasing trend over the past five years. The cycle was 27.06 days as of July 28, 2024, compared to 19.95 days on July 30, 2023, and 18.68 days on July 31, 2022. This suggests that the company is taking longer to convert its investments in inventory into cash.

The longer cash conversion cycle may indicate issues with inventory management, collection of receivables, or payment of payables. This trend could potentially strain the company's working capital and overall liquidity position. It is important for Campbell Soup Company to closely monitor and improve its cash conversion cycle to ensure efficient operations and maintain financial health.