Hormel Foods Corporation (HRL)

Liquidity ratios

Oct 27, 2024 Jul 28, 2024 Apr 28, 2024 Jan 28, 2024 Oct 29, 2023 Jul 30, 2023 Apr 30, 2023 Jan 29, 2023 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Jan 30, 2022 Oct 31, 2021 Jul 25, 2021 Apr 25, 2021 Jan 24, 2021 Oct 25, 2020 Jul 26, 2020 Apr 26, 2020 Jan 26, 2020
Current ratio 2.32 2.29 1.73 1.49 1.43 1.40 2.42 2.33 2.47 2.40 2.28 2.19 2.08 2.15 2.99 2.54 2.38 2.39 1.70 2.34
Quick ratio 1.17 0.98 0.97 0.77 0.68 0.64 1.05 1.03 1.27 1.18 0.60 1.18 1.09 0.98 1.90 1.75 1.65 1.68 0.88 1.27
Cash ratio 0.55 0.43 0.65 0.43 0.33 0.30 0.46 0.45 0.68 0.61 0.60 0.60 0.45 0.25 1.28 1.25 1.15 1.22 0.47 0.72

Hormel Foods Corporation's liquidity ratios have shown fluctuations over the past few quarters. The current ratio, which indicates the company's ability to cover short-term liabilities with its current assets, has generally been increasing, standing at a healthy average of around 2.24 over the observed period. This implies that Hormel Foods has a strong ability to meet its short-term obligations.

On the other hand, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has been more volatile, with an average of approximately 1.24. While the quick ratio has shown some variability, it generally indicates that Hormel Foods may face some challenges in meeting immediate liabilities without relying on inventory.

Lastly, the cash ratio, reflecting the company's ability to cover current liabilities with cash and cash equivalents, has also displayed fluctuations, averaging around 0.76. This ratio suggests that Hormel Foods may have some difficulty in meeting short-term obligations solely through available cash resources.

Overall, while the current ratio indicates a healthy liquidity position for Hormel Foods, the quick and cash ratios suggest that the company may need to closely monitor its reserves and working capital management to ensure efficient liquidity management in the future.

Additional liquidity measure

Oct 27, 2024 Jul 28, 2024 Apr 28, 2024 Jan 28, 2024 Oct 29, 2023 Jul 30, 2023 Apr 30, 2023 Jan 29, 2023 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Jan 30, 2022 Oct 31, 2021 Jul 25, 2021 Apr 25, 2021 Jan 24, 2021 Oct 25, 2020 Jul 26, 2020 Apr 26, 2020 Jan 26, 2020
Cash conversion cycle days 54.76 54.59 54.65 74.44 54.87 57.91 80.44 80.09 55.07 77.38 51.58 71.69 49.43 62.34 53.99 49.28 46.54 43.38 43.91 46.25

The cash conversion cycle of Hormel Foods Corporation has shown fluctuations over the past few quarters. It is a measure that represents the time taken to convert raw materials into inventory, then into sales, and finally into cash receipts.

On Oct 27, 2024, the cash conversion cycle was 54.76 days, a slight increase from the previous quarter's 54.59 days. This suggests that the company is taking just over 54 days to convert investments in raw materials and other inputs into cash receipts from customers.

The cycle was significantly longer in the Jan 28, 2024, quarter at 74.44 days, indicating a higher investment in inventory and slower conversion of sales into cash. This could potentially lead to working capital challenges or inefficiencies in managing inventory levels and collections from customers.

Overall, the company's cash conversion cycle has been relatively stable around the 50-80 day range, with some quarters showing better efficiency (e.g., 43.38 days on Jan 24, 2021) and others presenting challenges (e.g., 80.44 days on Apr 30, 2023). Continuous monitoring and potential improvements in inventory management, sales conversion, and receivables collections could help optimize the cash conversion cycle and enhance the company's liquidity and operational efficiency.