Campbell Soup Company Common Stock (CPB)

Campbell Soup Company Common Stock's liquidity ratios, including the current ratio, quick ratio, and cash ratio, show fluctuations over time. The current ratio, which measures the company's ability to meet short-term obligations with current assets, has been relatively low, ranging from 0.61 to 1.01. It improved in the latest quarter compared to previous periods, indicating a better ability to cover short-term liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows variability, ranging from 0.21 to 0.59. Although it has improved in recent quarters, it remains relatively low, suggesting that the company may have difficulty meeting immediate obligations without relying on inventory.

The cash ratio, which indicates the proportion of current liabilities that can be covered by cash and cash equivalents, has fluctuated significantly, ranging from 0.02 to 0.34. The company's cash ratio has improved in the most recent quarter, indicating a stronger ability to cover short-term obligations with cash on hand.

Overall, Campbell Soup Company's liquidity ratios show mixed results, with improvements in the current ratio and cash ratio suggesting enhanced liquidity in the most recent period. However, the company may still face challenges in quickly meeting its short-term obligations, as indicated by the relatively low quick ratio throughout the observed periods.

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Additional liquidity measure

The cash conversion cycle of Campbell Soup Company Common Stock has shown fluctuations over the past several reporting periods. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash inflows from customers.

In the most recent period as of July 28, 2024, the cash conversion cycle was 27.06 days, indicating that on average, it took the company approximately 27 days to convert its investments in inventory back into cash from sales. This represents an increase from the previous quarter, where the cycle was 23.78 days.

Looking back over the past year, there have been variations in the cash conversion cycle, with some periods showing shorter cycles (such as May 1, 2022, with a cycle of 9.39 days) and others showing longer cycles (such as Oct 27, 2019, with a cycle of 32.70 days). These fluctuations could be influenced by factors such as changes in sales volume, inventory management practices, or payment terms with suppliers and customers.

Overall, monitoring the cash conversion cycle can provide insights into the efficiency of Campbell Soup Company's operations in managing its working capital and generating cash flow. A shorter cash conversion cycle may indicate improved liquidity and operational efficiency, while a longer cycle could signal potential inefficiencies in the company's supply chain or collection processes. It is essential for investors and analysts to track changes in the cash conversion cycle over time to assess the company's financial health and effectiveness in converting investments into cash.