General Mills Inc (GIS)

Cash ratio

		May 31, 2024	May 26, 2024	May 31, 2023	May 28, 2023	May 31, 2022
Cash and cash equivalents	US$ in thousands	418,000	418,000	585,500	585,500	569,400
Short-term investments	US$ in thousands	0	4,600	117,200	122,700	249,800
Total current liabilities	US$ in thousands	7,033,100	7,033,100	7,535,700	7,535,700	8,019,900
Cash ratio		0.06	0.06	0.09	0.09	0.10

May 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($418,000K + $0K) ÷ $7,033,100K
= 0.06

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. General Mills Inc's cash ratio has been declining over the past few years, dropping from 0.10 on May 31, 2022, to 0.06 on May 31, 2024. This indicates that the company may have less cash available relative to its current liabilities. A lower cash ratio could suggest potential liquidity challenges for General Mills Inc, as it may struggle to meet its short-term obligations solely based on its cash reserves. Management should closely monitor the trend in the cash ratio and ensure appropriate cash management strategies to maintain adequate liquidity levels.