Hormel Foods Corporation (HRL)
Cash ratio
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 736,532 | 982,107 | 613,530 | 1,714,310 | 672,901 |
| Short-term investments | US$ in thousands | 16,664 | 16,149 | 21,162 | 17,338 | 14,736 |
| Total current liabilities | US$ in thousands | 2,311,780 | 1,473,270 | 1,415,650 | 1,503,960 | 1,105,050 |
| Cash ratio | 0.33 | 0.68 | 0.45 | 1.15 | 0.62 |
October 29, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($736,532K
+ $16,664K)
÷ $2,311,780K
= 0.33
The cash ratio of Hormel Foods Corp. has experienced fluctuations over the past five years. The ratio, which measures the company's ability to pay off its current liabilities with its available cash and cash equivalents, was 0.34 as of October 29, 2023. This represents a decrease from the previous year's ratio of 0.71. Comparing this to the ratio of 0.48 in 2021 and 1.17 in 2020, it is evident that the company's liquidity position has weakened in the most recent year. The decline in the cash ratio may indicate that Hormel Foods Corp. is holding less cash relative to its current liabilities, which could potentially raise concerns about its short-term solvency. Further analysis of the company's cash management and working capital trends would be necessary to understand the factors driving these changes in the cash ratio.