Hormel Foods Corporation (HRL)

Cash ratio

Jan 31, 2025 Oct 31, 2024 Oct 27, 2024 Jul 31, 2024 Jul 28, 2024 Apr 30, 2024 Apr 28, 2024 Jan 31, 2024 Jan 28, 2024 Oct 31, 2023 Oct 29, 2023 Jul 31, 2023 Jul 30, 2023 Apr 30, 2023 Jan 31, 2023 Jan 29, 2023 Oct 31, 2022 Oct 30, 2022 Jul 31, 2022 May 1, 2022
Cash and cash equivalents US$ in thousands 840,398 741,881 741,881 537,476 537,476 1,486,370 1,486,370 963,212 963,212 736,532 736,532 669,124 669,124 580,496 599,789 599,789 982,107 982,107 850,344 861,719
Short-term investments US$ in thousands 26,016 24,742 24,742 24,454 24,454 23,074 23,074 18,712 18,712 16,664 16,664 17,423 17,423 17,531 17,792 17,792 16,149 16,149 18,314 23,478
Total current liabilities US$ in thousands 1,331,810 1,399,300 1,399,300 1,309,750 1,309,750 2,304,810 2,304,810 2,260,780 2,260,780 2,311,780 2,311,780 2,320,620 2,320,620 1,305,220 1,373,380 1,373,380 1,473,270 1,473,270 1,419,900 1,480,660
Cash ratio 0.65 0.55 0.55 0.43 0.43 0.65 0.65 0.43 0.43 0.33 0.33 0.30 0.30 0.46 0.45 0.45 0.68 0.68 0.61 0.60

January 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($840,398K + $26,016K) ÷ $1,331,810K
= 0.65

Hormel Foods Corporation's cash ratio has shown fluctuations over the past few years, ranging from a low of 0.30 to a high of 0.68. The cash ratio represents the company's ability to cover its short-term obligations with its cash and cash equivalents.

The trend in the cash ratio indicates that the company had a relatively strong liquidity position in the fiscal year 2023, with ratios above 0.45 for most of the year. However, there was a significant drop in the cash ratio in the third quarter of 2023, reaching a low of 0.30. This may suggest that the company faced challenges in meeting its short-term obligations with available cash during that period.

Subsequently, the cash ratio improved in the following quarters, reaching 0.65 in the second quarter of 2024. This indicates that the company was able to strengthen its liquidity position and increase its ability to cover short-term obligations with cash and cash equivalents.

Overall, while there have been fluctuations in the cash ratio, Hormel Foods Corporation has generally maintained a reasonable level of liquidity, with the ratio consistently above 0.30, which is considered a good indicator of short-term liquidity.