General Mills Inc (GIS)

The liquidity ratios of General Mills Inc. from the provided data reflect a generally stable but gradually improving short-term liquidity position over the analyzed period.

Current Ratio: The current ratio has exhibited slight fluctuations but displays an overall upward trend. Beginning at approximately 0.60 in late August 2022, it declined marginally to around 0.54 by February 2023, indicating a period of weaker short-term liquidity. Subsequently, the ratio increased steadily, reaching 0.69 in mid-2023 and further improving to 0.72 by late August 2023. The most recent data from late 2024 reveals a notable increase to 0.92, approaching a more comfortable liquidity cushion. This suggests an enhanced ability to meet short-term obligations with current assets.

Quick Ratio: This more stringent measure of liquidity has remained relatively stable, with values around 0.27 to 0.36 during 2022 and early 2023, indicating limited immediate liquidity when excluding inventory. A slight uptick occurs around late 2023 and mid-2024, peaking at approximately 0.51 in late 2024. Despite the fluctuations, the quick ratio generally remains below 0.4, indicating that a significant portion of current assets is tied up in inventory or less liquid assets, which may limit the company's capacity to quickly settle short-term liabilities without liquidating inventory.

Cash Ratio: The most conservative liquidity measure remained low throughout most of the period, consistently below 0.10, signaling that cash holdings alone provide only a small buffer against short-term liabilities. In late 2023, there is a significant increase to 0.29, representing a temporary enhancement in immediate liquidity. However, subsequent months show a reversion to lower levels, generally around 0.05 to 0.08, indicating limited reliance on cash alone to cover short-term commitments.

Summary:
Overall, General Mills Inc. has demonstrated a relatively stable current ratio over time, with notable improvement in late 2024. The gradual increase in the current ratio signifies improved liquidity management or increased current assets relative to current liabilities. The quick and cash ratios remain comparatively low, underscoring the company's dependence on current assets with less liquidity (such as inventory) and limited cash reserves for immediate obligations. The recent upward movement in the current ratio suggests a potentially healthier liquidity position, but the relatively low quick and cash ratios imply that the company may need to manage inventory and cash flows more effectively to ensure sufficient liquidity in fast-acting scenarios.

---

See also:

General Mills Inc Liquidity Ratios (Quarterly Data)

---

Additional liquidity measure

The financial data for General Mills Inc.'s cash conversion cycle (CCC) over the period from August 2022 through May 2025 demonstrates a consistent trend of negative CCC values, indicating that the company's cash conversion cycle remains negative throughout this period. A negative CCC suggests that the company is able to generate cash from operations before it needs to pay its suppliers, reflecting a favorable working capital management position.

Examining specific periods, the CCC began at approximately -13.4 days in August 2022 and showed modest fluctuations, remaining within the narrow range of roughly -13 to -14 days through August 2023. During this time, the CCC was relatively stable, indicating consistent operational efficiency and effective management of inventory and receivables relative to payables.

Starting from late 2022 and into 2023, minor variations reflect ongoing operational stability. However, notable shifts appear from May 2023 onwards, when the negative CCC deepens significantly, reaching approximately -20.0 days in both May 2023 and May 2024, signaling an improvement in the company's cash flow timing.

The most pronounced change occurs in late 2024, when the CCC drops further to about -27.5 days in November 2024. This indicates an even more accelerated cash conversion cycle, which may result from faster collection of receivables, extended supplier payment terms, or a combination of both. The sustained negative values across the entire period imply that the company consistently manages its working capital efficiently, often collecting cash from sales before settling its payables.

The relatively stable and increasingly negative trend in the cash conversion cycle underscores General Mills Inc.'s ability to operate with a cash efficient working capital cycle. It suggests a strategic management approach that optimizes receivables and payables to enhance liquidity and reduce financing costs, maintaining a robust operational liquidity position throughout the analyzed period.