Freshpet Inc (FRPT)

Quick 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 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
Receivables US$ in thousands 62,654 68,419 65,015 68,156 68,507 56,754 54,415 51,889 49,513 57,572 48,235 62,090 61,458 34,780 32,217 33,962 28,818 18,438 21,644 22,651
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
Quick ratio 3.71 3.41 3.81 3.55 3.98 3.96 4.69 5.30 7.82 2.12 2.35 5.50 0.95 1.82 7.06 5.97 8.67 3.43 4.83 7.75

March 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($243,732K + $—K + $62,654K) ÷ $82,574K
= 3.71

The quick ratio of Freshpet Inc. exhibits significant fluctuations over the analyzed period from June 30, 2020, through March 31, 2025. Initially, the ratio was notably high at 7.75 in June 2020, indicating a strong liquidity position with ample short-term assets readily available to cover current liabilities. This elevated level sharply declined to 4.83 by September 2020 and further decreased to 3.43 by December 2020, suggesting a reduction in the company's quick assets relative to its short-term obligations during this period.

In the following quarters, the ratio experienced notable volatility. It surged again to 8.67 in March 2021, reaching its peak during the analyzed timeframe, perhaps reflecting a temporary improvement in liquidity or strategic shifts in asset management. Subsequently, the ratio ranged between approximately 1.82 and 7.06, with temporary declines indicating periods where quick assets relative to current liabilities diminished.

A significant reduction is observed in the December 2021 quarter, where the ratio fell sharply to 1.82, signaling a potential tightening of liquidity or a substantial increase in current liabilities relative to quick assets. The ratio continued to decrease further, reaching its lowest point at 0.95 in March 2022, indicating that at that time, quick assets were just marginally sufficient to cover short-term obligations, representing a potential liquidity concern.

Post-March 2022, the quick ratio demonstrated signs of improvement, rising to 5.50 in June 2022 and fluctuating thereafter between approximately 2.35 and 7.82. Notably, from March 2023 onward, the ratio consistently ranged above 3. with values of 7.82, 5.30, 4.69, 3.96, 3.98, 3.55, 3.81, and 3.41 through the last reported quarter. This indicates a relatively stable and adequate liquidity position in recent periods, with quick assets sufficiently covering current liabilities.

Throughout the analyzed period, the high initial ratios suggest a conservative liquidity stance with readily available assets. The considerable decline in late 2021 and early 2022 warrants attention, as it may reflect increased current liabilities, decreased liquid assets, or strategic changes in asset composition. Overall, while the company experienced periods of liquidity tightening, recent data indicate a normalized and healthier liquidity level, aligning with standards for operational stability.