Freshpet Inc (FRPT)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 268,633 296,871 132,735 72,788 67,247
Short-term investments US$ in thousands — — — — 27,894
Receivables US$ in thousands 68,419 56,754 57,572 34,780 18,438
Total current liabilities US$ in thousands 98,869 89,222 89,614 58,946 33,121
Quick ratio 3.41 3.96 2.12 1.82 3.43

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($268,633K + $—K + $68,419K) ÷ $98,869K
= 3.41

The quick ratio of Freshpet Inc. has experienced notable fluctuations over the period from December 31, 2020, to December 31, 2024. At the end of 2020, the quick ratio stood at 3.43, indicating a strong liquidity position with ample short-term assets excluding inventory to cover current liabilities. By the end of 2021, this ratio declined significantly to 1.82, reflecting a reduction in liquidity and possibly an increased reliance on inventory or other current assets to meet short-term obligations.

In 2022, the ratio saw an improvement, rising modestly to 2.12, suggesting some stabilization in short-term liquidity. The most substantial change occurred by the end of 2023, when the quick ratio increased sharply to 3.96, surpassing the 2020 levels and signifying a robust liquidity position at that time. This indicates that Freshpet Inc. had a healthy buffer of quick assets relative to current liabilities, likely due to improved cash reserves or current assets excluding inventory.

However, by the end of 2024, the quick ratio slightly decreased to 3.41. Although this represents a marginal decline from 2023, the ratio remains substantially higher than the ratios observed in 2021 and 2022. Overall, the trend demonstrates considerable liquidity strength, with periods of fluctuation, and a notable recovery after 2021, which may reflect improved short-term financial health or strategic shifts in asset management.