Hormel Foods Corporation (HRL)
Cash ratio
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 741,881 | 736,532 | 982,107 | 613,530 | 1,714,310 |
| Short-term investments | US$ in thousands | 24,742 | 16,664 | 16,149 | 21,162 | 17,338 |
| Total current liabilities | US$ in thousands | 1,399,300 | 2,311,780 | 1,473,270 | 1,415,650 | 1,503,960 |
| Cash ratio | 0.55 | 0.33 | 0.68 | 0.45 | 1.15 |
October 27, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($741,881K
+ $24,742K)
÷ $1,399,300K
= 0.55
The cash ratio of Hormel Foods Corporation has fluctuated over the past five years, ranging from 0.33 to 1.15. The ratio indicates the company's ability to cover its short-term liabilities using its readily available cash and cash equivalents.
The cash ratio was relatively low in October 2023 at 0.33, suggesting that the company had a lower level of cash and cash equivalents compared to its current liabilities at that time. This could indicate a potential liquidity risk if the company faced unexpected financial obligations.
In contrast, the cash ratio was highest in October 2020 at 1.15, indicating that the company had a significant amount of cash and cash equivalents relative to its short-term liabilities. This would suggest a strong ability to meet immediate financial obligations without relying on external financing.
Overall, the fluctuation in Hormel Foods Corporation's cash ratio over the five-year period may reflect changing business conditions, investment decisions, or cash management strategies. It is essential for investors and stakeholders to monitor this ratio alongside other financial metrics to assess the company's overall liquidity position and financial health.