Darden Restaurants Inc (DRI)

Cash ratio

		May 31, 2025	May 31, 2024	May 26, 2024	May 31, 2023	May 28, 2023
Cash and cash equivalents	US$ in thousands	254,500	194,800	194,800	367,800	367,800
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	2,247,500	2,192,500	2,192,500	1,937,400	1,937,400
Cash ratio		0.11	0.09	0.09	0.19	0.19

May 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($254,500K + $—K) ÷ $2,247,500K
= 0.11

The cash ratio of Darden Restaurants Inc. demonstrates notable fluctuations over the provided periods. As of May 28 and May 31, 2023, the cash ratio was recorded at 0.19, indicating that the company's cash and cash equivalents were equivalent to approximately 19% of its current liabilities. This suggests a relatively conservative liquidity position, with a portion of the company's short-term obligations covered by readily available cash assets.

In subsequent periods, the cash ratio declined significantly. By May 26 and May 31, 2024, the ratio dropped to 0.09, reflecting a substantial decrease in the company's liquidity cushion, with cash and cash equivalents covering roughly 9% of current liabilities. Such a decrease may point to increased short-term commitments or a reduction in liquid assets, warranting attention to the company's liquidity management during this period.

Looking further ahead, the cash ratio experienced a slight recovery by May 31, 2025, reaching 0.11. This indicates a modest improvement in liquidity, with cash and cash equivalents again covering around 11% of short-term liabilities. Although the ratio remains below the 0.20 level observed in 2023, the incremental increase suggests some stabilization or strategic liquidity adjustments.

Overall, the trend reflects a decline in Darden Restaurants Inc.'s immediate liquidity from 2023 to 2024, followed by a slight improvement into 2025. The ratios suggest that the company's ability to cover its current liabilities solely with cash is limited, particularly in 2024, which may impact short-term financial flexibility and warrants further analysis of underlying causes and broader liquidity strategies.