General Mills Inc (GIS)
Liquidity ratios
| May 31, 2025 | May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | |
|---|---|---|---|---|---|
| Current ratio | 0.67 | 0.65 | 0.65 | 0.69 | 0.69 |
| Quick ratio | 0.27 | 0.34 | 0.30 | 0.36 | 0.32 |
| Cash ratio | 0.05 | 0.06 | 0.06 | 0.09 | 0.09 |
The liquidity position of General Mills Inc., as reflected in the provided ratios over the specified periods, indicates a relatively cautious liquidity stance with consistent levels across the analyzed dates.
The current ratio, which measures the company’s ability to meet its short-term obligations with its total current assets, has remained relatively stable, fluctuating marginally from 0.69 in both May 2023 periods to 0.65 in May 2024 and slightly improving to 0.67 by May 2025. This ratio, consistently below 1, suggests that the company may potentially face challenges in covering its current liabilities with its total current assets, highlighting a lean liquidity buffer.
The quick ratio, which refines the current ratio by excluding inventory from current assets, shows a modest decline from approximately 0.36 in the May 2023 period to 0.30 in May 2024, and down further to 0.27 in May 2025. Despite slight fluctuations, the ratios remain below 0.4, indicating that the company's most liquid assets, such as receivables and cash equivalents, are not sufficient to fully cover short-term liabilities without inventory.
The cash ratio, a more conservative measure of liquidity focusing solely on cash and cash equivalents, underscores a persistent narrow margin. The ratio held steady at 0.09 in May 2023, then decreased to 0.06 in May 2024, and further declined to 0.05 in May 2025. This trend reflects a minimal cash buffer relative to current liabilities, implying limited immediate liquidity in cash or cash equivalents.
Overall, the trends across all three liquidity ratios suggest that General Mills Inc. maintains a conservative liquidity profile with ratios below commonly recommended thresholds (such as the current ratio of 1 and quick ratio near 1). The consistency in these figures over the analyzed periods indicates steady management of liquidity, but also underlines potential vulnerabilities in meeting short-term obligations solely through liquid assets.
See also:
Additional liquidity measure
| May 31, 2025 | May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -26.40 | -23.38 | 303.81 | -17.90 | 313.87 |
The data indicates that General Mills Inc’s cash conversion cycle (CCC) has experienced significant fluctuations over the specified periods. As of May 28, 2023, the CCC was approximately 313.87 days, reflecting the length of time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. This relatively high figure suggests a lengthy process of managing inventory, receivables, and payables, which could be indicative of longer inventory holding periods or extended receivable collection times.
By May 31, 2023, the CCC had dramatically decreased to a negative value of approximately -17.90 days. A negative CCC generally signifies that the company is able to collect cash from customers before it needs to pay its suppliers, thereby optimizing its working capital and potentially enhancing liquidity and operational efficiency.
Looking forward, the data for May 26, 2024, shows the CCC returning to around 303.81 days, suggesting that the company’s cycle has reverted to a lengthier period similar to the one observed in 2023, which may point toward operational adjustments or cyclical business factors influencing the cycle duration.
By May 31, 2024, the CCC further declined to approximately -23.38 days, indicating an improved position where receivables are collected even faster relative to payables, thus further enhancing cash flow management. This trend continued into May 31, 2025, with the CCC reaching approximately -26.40 days, signaling an ongoing process of optimizing cash conversion and sustaining a cycle where cash inflows precede outflows.
Overall, the observed trend reflects a pattern of initial elongation of the cash conversion cycle, followed by strategic improvements leading to negative cycles, which are generally favorable for the company’s liquidity position. The negative and decreasing values over the periods analyzed suggest efficiencies in receivables collection and perhaps a more aggressive management of payables, contributing to a shorter or negative cycle and supporting stronger cash flow management.