Flowers Foods Inc (FLO)

Flowers Foods Inc's current ratio has shown fluctuations over the analyzed period, ranging from a low of 1.04 to a high of 1.73. The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. A ratio above 1 indicates that the company has more current assets than current liabilities, which is generally considered favorable.

The quick ratio, also known as the acid-test ratio, reflects the company's ability to meet its short-term obligations with its most liquid assets. Flowers Foods Inc's quick ratio has varied significantly, with values ranging from 0.01 to 1.01. A higher quick ratio is typically preferred as it suggests a greater ability to meet short-term liabilities without relying on the sale of inventory.

The cash ratio, which is the most stringent liquidity measure, considers only the most liquid assets like cash and cash equivalents in relation to current liabilities. Flowers Foods Inc's cash ratio has also shown fluctuations, ranging from 0.01 to 0.57. A higher cash ratio indicates a stronger ability to cover short-term liabilities with the company's readily available cash.

In summary, Flowers Foods Inc's liquidity ratios overall show some variability over the analyzed period, with the current ratio generally above 1, indicating a sufficient level of liquidity to cover short-term obligations. However, the quick ratio and cash ratio demonstrate more volatility, suggesting changes in the company's ability to meet short-term obligations with its most liquid assets.

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Additional liquidity measure

The cash conversion cycle of Flowers Foods Inc fluctuated over the period from September 2021 to December 2024. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

The trend in Flowers Foods Inc's cash conversion cycle shows variations in efficiency in managing its working capital. A lower number of days in the cash conversion cycle indicates that the company is able to generate cash quickly from its operational activities, while a higher number of days suggests a longer period between the company's investment in inventory and the collection of cash from sales.

The company experienced a mix of positive and negative cash conversion cycle days during the period, indicating fluctuations in its working capital management efficiency. For instance, there were instances when the company converted its investments into cash rapidly, as seen in April 2023 and April 2022, with 5.22 and 7.65 days, respectively.

On the other hand, there were periods where the cash conversion cycle extended, such as in December 2022 and December 2023, with 49.44 and 27.59 days, respectively. These longer cycles may imply potential issues with inventory management, sales collection processes, or liquidity challenges.

Overall, monitoring the cash conversion cycle is crucial for assessing how efficiently Flowers Foods Inc manages its working capital, inventory, and cash flows. Analyzing this metric helps evaluate the effectiveness of the company's operations and financial health in converting investments into cash, which is essential for sustaining and growing its business.