National Beverage Corp (FIZZ)

National Beverage Corp's liquidity ratios have shown significant improvement over the past five years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown a consistent upward trend. The current ratio increased from 3.25 in 2020 to 3.89 in 2024, indicating that the company has a strong liquidity position and is well-equipped to meet its short-term obligations.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also shown improvement over the years. The quick ratio increased from 2.75 in 2020 to 3.12 in 2024, suggesting that the company has a greater ability to meet its short-term liabilities without relying on inventory sales.

Furthermore, the cash ratio, which assesses the company's ability to cover its current liabilities with cash and cash equivalents, has exhibited a notable improvement. The cash ratio increased significantly from 2.15 in 2020 to 2.37 in 2024, indicating that the company has a strong cash position to meet its immediate financial obligations.

Overall, National Beverage Corp's liquidity ratios paint a positive picture of the company's financial health, as they demonstrate a consistent strengthening of its ability to meet short-term obligations and manage liquidity effectively.

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Additional liquidity measure

The cash conversion cycle of National Beverage Corp has shown a fluctuating trend over the past five years. In the most recent fiscal year ending on April 27, 2024, the company's cash conversion cycle was 34.52 days, indicating a slight improvement compared to the previous year's figure of 36.63 days.

On a historical basis, the cash conversion cycle was relatively stable between 2022 and 2024, hovering around the mid-30s range. However, there was a noticeable increase in the cycle in 2021, where it peaked at 19.74 days, before stabilizing at higher levels in the subsequent years.

A longer cash conversion cycle suggests that the company takes more time to convert its investments in inventory and receivables into cash from sales, which may result in a strain on liquidity and potential inefficiencies in working capital management. Conversely, a shorter cycle implies quicker turnover of resources and better management of cash flows.

Overall, National Beverage Corp should continue monitoring its cash conversion cycle closely and focus on optimizing its inventory management and accounts receivable processes to enhance efficiency and strengthen its financial position.