Freshpet Inc (FRPT)

Cash ratio

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020
Cash and cash equivalents US$ in thousands 243,732 268,633 274,594 251,699 257,894 296,871 338,107 244,048 337,143 132,735 240,310 307,345 29,730 72,788 170,836 280,323 340,967 67,247 84,185 107,728
Short-term investments US$ in thousands — — -0 — — — — 114,437 49,326 — 19,891 19,840 — — — 27,276 27,658 27,894 10,000 20,001
Total current liabilities US$ in thousands 82,574 98,869 89,242 90,000 81,946 89,222 83,773 77,442 55,739 89,614 130,972 70,839 96,444 58,946 28,743 57,202 45,823 33,121 23,970 19,412
Cash ratio 2.95 2.72 3.08 2.80 3.15 3.33 4.04 4.63 6.93 1.48 1.99 4.62 0.31 1.23 5.94 5.38 8.04 2.87 3.93 6.58

March 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($243,732K + $—K) ÷ $82,574K
= 2.95

An analysis of Freshpet Inc.'s cash ratio over the period indicates fluctuations reflecting the company's liquidity profile. The cash ratio, measured as cash and cash equivalents divided by current liabilities, has experienced significant volatility from June 30, 2020, through March 31, 2025.

Initially, the ratio was high at 6.58 in June 2020, suggesting a robust short-term liquidity position with ample cash reserves relative to current liabilities. This elevated level persisted into September 2020 at 3.93 and December 2020 at 2.87, indicating that the firm maintained a considerable cushion of cash compared to its current obligations during this period.

A notable increase occurred by March 2021, with the ratio peaking at 8.04, further emphasizing a very conservative liquidity stance. Subsequent quarters saw fluctuations, with a decline to 1.23 by December 2021, indicating a decrease in liquid cash holdings relative to current liabilities, potentially reflecting increased operational investments or reduced liquidity buffers.

The ratio significantly dropped to 0.31 in March 2022, marking a substantial reduction in cash reserves relative to liabilities, potentially signaling a period of tightening liquidity or increased current liabilities. Although the ratio recovered somewhat to 4.62 in June 2022, it declined again to 1.99 by September 2022 and further to 1.48 in December 2022, illustrating ongoing variability but generally indicating a cautious stance on liquidity.

From March 2023 onwards, the cash ratio increased again, reaching 6.93 in that quarter, which indicates a restored level of cash security, before declining to 4.63 in June 2023 and further to 4.04 in September 2023. The ratio continued to decrease gradually through the end of 2023 and into early 2024, reaching 3.15 in March 2024, with subsequent fluctuations leading to 2.80 in June 2024, 3.08 in September 2024, and 2.72 in December 2024. The latest available data shows a ratio of 2.95 in March 2025, suggesting a relatively stable but lower liquidity buffer compared to earlier periods.

Overall, the cash ratio's trend demonstrates periods of high liquidity followed by notable declines, indicating variability in cash holdings relative to current liabilities. While the company experienced moments of conservative liquidity cushions, the later periods highlight a tendency toward maintaining moderate cash reserves, possibly reflecting strategic adjustments or shifts in operational needs.