Darden Restaurants Inc (DRI)
Liquidity ratios
| May 26, 2024 | Feb 25, 2024 | Nov 26, 2023 | Aug 27, 2023 | May 28, 2023 | Feb 26, 2023 | Nov 27, 2022 | Aug 28, 2022 | May 29, 2022 | Feb 27, 2022 | Nov 28, 2021 | Aug 29, 2021 | May 30, 2021 | Feb 28, 2021 | Nov 29, 2020 | Aug 30, 2020 | May 31, 2020 | Feb 23, 2020 | Nov 24, 2019 | Aug 25, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.38 | 0.39 | 0.36 | 0.40 | 0.51 | 0.46 | 0.47 | 0.52 | 0.64 | 0.70 | 0.85 | 0.97 | 1.01 | 0.79 | 0.72 | 0.63 | 0.61 | 0.41 | 0.34 | 0.43 |
| Quick ratio | 0.12 | 0.14 | 0.12 | 0.12 | 0.23 | 0.17 | 0.16 | 0.23 | 0.27 | 0.33 | 0.46 | 0.60 | 0.69 | 0.63 | 0.53 | 0.45 | 0.45 | 0.22 | 0.14 | 0.26 |
| Cash ratio | 0.09 | 0.11 | 0.08 | 0.09 | 0.19 | 0.14 | 0.13 | 0.21 | 0.23 | 0.31 | 0.42 | 0.56 | 0.66 | 0.60 | 0.50 | 0.42 | 0.43 | 0.19 | 0.10 | 0.23 |
Darden Restaurants Inc's liquidity ratios demonstrate some fluctuations over the periods observed. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, has shown a declining trend from 0.43 in November 2019 to 0.38 in May 2024, indicating a potential weakening liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also exhibited a downward trajectory from 0.26 in November 2019 to 0.12 in May 2024. This suggests that Darden Restaurants may have difficulty meeting its short-term obligations without relying on inventory.
Moreover, the cash ratio, which reflects the company's ability to cover its current liabilities with its cash and cash equivalents, has seen a similar decline from 0.23 in November 2019 to 0.09 in May 2024. This indicates a decreasing ability to settle immediate obligations solely with cash holdings.
Overall, the downward trends in these liquidity ratios suggest potential liquidity challenges for Darden Restaurants Inc. It is essential for the company to closely monitor its cash flow management and assess its ability to meet upcoming liabilities to ensure financial stability and operational continuity.
Additional liquidity measure
| May 26, 2024 | Feb 25, 2024 | Nov 26, 2023 | Aug 27, 2023 | May 28, 2023 | Feb 26, 2023 | Nov 27, 2022 | Aug 28, 2022 | May 29, 2022 | Feb 27, 2022 | Nov 28, 2021 | Aug 29, 2021 | May 30, 2021 | Feb 28, 2021 | Nov 29, 2020 | Aug 30, 2020 | May 31, 2020 | Feb 23, 2020 | Nov 24, 2019 | Aug 25, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -6.74 | -6.97 | -7.29 | -9.94 | -10.16 | -9.21 | -11.03 | -11.48 | -7.00 | -9.10 | -11.24 | -10.75 | -11.15 | -5.12 | -1.98 | -5.05 | -2.76 | -11.24 | -10.92 | -13.03 |
The cash conversion cycle for Darden Restaurants Inc has fluctuated over the past several quarters. In general, the company has managed to efficiently convert its resources into cash. The negative values indicate that Darden Restaurants Inc has been able to collect cash from its customers before having to pay its suppliers, resulting in a surplus of cash during those periods.
It is noteworthy that the cash conversion cycle has shown inconsistency, with periods of more efficient cash management followed by less favorable performance. The most recent data point shows a cash conversion cycle of -6.74 days, indicating a relatively efficient cash management performance. However, the company experienced its longest cash conversion cycle of -13.03 days around November 24, 2019.
Overall, Darden Restaurants Inc has demonstrated varying levels of effectiveness in managing its cash conversion cycle, and it is essential for the company to focus on maintaining efficient cash utilization to support its financial performance and liquidity position.