General Mills Inc (GIS)

General Mills Inc's liquidity ratios have shown a declining trend over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 0.70 in 2021 to 0.65 in 2024. This indicates that General Mills may have difficulty meeting its short-term obligations.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also declined from 0.42 in 2021 to 0.30 in 2024. This suggests that General Mills may have limited ability to pay off its current liabilities without relying on inventory.

The cash ratio, which provides the most conservative measure of liquidity by considering only cash and cash equivalents to cover short-term obligations, decreased from 0.23 in 2021 to 0.06 in 2024. This sharp decline implies that General Mills' cash position has weakened significantly over the years.

Overall, General Mills Inc's liquidity ratios indicate a deteriorating liquidity position, with a decreasing ability to meet its short-term obligations using its current assets. The declining trend in the current, quick, and cash ratios suggests that the company may face challenges in managing its short-term financial needs effectively.

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See also:

General Mills Inc Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of General Mills Inc has shown some fluctuations over the past five years, with the cycle ranging from 273.18 days in 2021 to 313.87 days in 2023. In 2024, the cash conversion cycle decreased to 303.81 days. This metric reflects the time it takes for General Mills to convert its investments in inventory back into cash from sales.

A longer cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or paying payables. It could also imply a slower turnover of cash within the company's operations. Conversely, a shorter cycle suggests better management of working capital and more efficient utilization of resources.

Overall, General Mills Inc has experienced fluctuations in its cash conversion cycle over the past five years. It would be important to delve deeper into the underlying factors driving these changes to assess the company's operational efficiency and financial health effectively.