Flowers Foods Inc (FLO)
Liquidity ratios
| Dec 31, 2023 | Oct 7, 2023 | Jul 15, 2023 | Apr 22, 2023 | Dec 31, 2022 | Oct 8, 2022 | Apr 23, 2022 | Dec 31, 2021 | Oct 9, 2021 | Jul 17, 2021 | Apr 24, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jul 11, 2020 | Apr 18, 2020 | Dec 31, 2019 | Oct 5, 2019 | Jul 13, 2019 | Apr 20, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.04 | 1.07 | 1.35 | 1.32 | 1.43 | 1.41 | 1.52 | 1.44 | 1.58 | 1.65 | 1.71 | 1.66 | 1.68 | 1.58 | 1.65 | 1.05 | 1.08 | 1.15 | 1.17 | 1.36 |
| Quick ratio | 0.56 | 0.58 | 0.81 | 0.74 | 0.91 | 0.29 | 1.01 | 0.97 | 0.57 | 0.57 | 1.19 | 1.21 | 0.63 | 0.56 | 0.50 | 0.02 | 0.01 | 0.02 | 0.02 | 0.06 |
| Cash ratio | 0.03 | 0.02 | 0.02 | 0.05 | 0.29 | 0.29 | 0.38 | 0.36 | 0.57 | 0.57 | 0.54 | 0.61 | 0.63 | 0.56 | 0.50 | 0.02 | 0.01 | 0.02 | 0.02 | 0.06 |
Flowers Foods Inc's liquidity ratios exhibit some fluctuation over the past five years. The current ratio, which indicates the company's ability to cover its short-term liabilities with its current assets, has ranged between 1.04 and 1.71. The current ratio has generally decreased over the years, indicating a potential weakening in the company's short-term liquidity position.
In contrast, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has shown greater variability, ranging from 0.02 to 1.21. This suggests that Flowers Foods Inc may have struggled at times to meet its short-term obligations without relying on selling inventory.
The cash ratio, reflecting the proportion of cash and cash equivalents to current liabilities, has also shown variability, ranging from 0.02 to 0.63. Flowers Foods Inc's cash ratio has generally decreased since 2020, indicating that the company may have reduced cash reserves relative to its current liabilities.
Overall, the liquidity ratios suggest that Flowers Foods Inc may face challenges in maintaining strong short-term liquidity, as evidenced by the downward trend in the current and cash ratios, alongside the fluctuations in the quick ratio. Proper management of liquidity is crucial for the company to meet its short-term obligations and fund its operations effectively.
Additional liquidity measure
| Dec 31, 2023 | Oct 7, 2023 | Jul 15, 2023 | Apr 22, 2023 | Dec 31, 2022 | Oct 8, 2022 | Apr 23, 2022 | Dec 31, 2021 | Oct 9, 2021 | Jul 17, 2021 | Apr 24, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jul 11, 2020 | Apr 18, 2020 | Dec 31, 2019 | Oct 5, 2019 | Jul 13, 2019 | Apr 20, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 14.54 | 16.06 | 16.28 | 10.74 | -0.45 | -36.51 | 7.69 | 8.00 | -15.45 | -16.49 | 6.17 | 8.65 | -21.51 | -20.66 | -16.45 | -19.43 | -29.47 | -48.17 | -86.60 | -93.00 |
The cash conversion cycle of Flowers Foods Inc has exhibited varying trends over the past few years. From December 31, 2018, to October 5, 2019, the company experienced significantly negative cash conversion cycles, indicating a favorable cash position and efficient management of working capital. This trend continued until April 24, 2021, when the cash conversion cycle turned positive, suggesting a potential slowdown in cash inflows relative to outflows.
Subsequently, from April 24, 2021, to December 31, 2023, the cash conversion cycle fluctuated between positive and negative values, with the duration ranging from -36.51 days to 16.28 days. The positive cycles indicate that the company took longer to convert its investments in inventory and receivables into cash, potentially resulting in tied-up capital and liquidity challenges.
Overall, fluctuations in the cash conversion cycle reflect changes in inventory management, accounts receivable collection efficiency, and accounts payable terms. Close monitoring and optimization of these components are essential for Flowers Foods Inc to maintain a healthy cash conversion cycle, enhance liquidity, and support sustainable business operations.