Hershey Co (HSY)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.96 | 0.97 | 0.80 | 0.90 | 1.57 |
| Quick ratio | 0.19 | 0.13 | 0.14 | 0.13 | 0.60 |
| Cash ratio | 0.19 | 0.13 | 0.14 | 0.13 | 0.60 |
Hershey Co's liquidity ratios show mixed results over the past five years. The current ratio decreased from 1.57 in 2020 to 0.96 in 2024, indicating a decline in the company's ability to cover short-term obligations with its current assets. The quick ratio also decreased over the same period, from 0.60 in 2020 to 0.19 in 2024, suggesting a significant decrease in the company's ability to meet immediate financial demands without relying on inventory.
Furthermore, the cash ratio shows a similar trend, decreasing from 0.60 in 2020 to 0.19 in 2024, indicating a reduced ability to cover current liabilities solely with available cash and cash equivalents. Overall, Hershey Co's liquidity position appears to have weakened over the five-year period, as reflected in the declining values of its current, quick, and cash ratios. This trend may raise concerns about the company's short-term financial health and ability to manage its obligations effectively.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 77.57 | 79.37 | 72.32 | 73.29 | 79.11 |
The cash conversion cycle of Hershey Co has shown a fluctuating trend over the past five years. In December 31, 2020, the cash conversion cycle was 79.11 days, indicating the time it took the company to convert its investments in inventory and other resources into cash.
However, there was a noticeable improvement in efficiency by December 31, 2022, with the cycle decreasing to 72.32 days. This suggests that Hershey Co was able to manage its working capital more effectively during that period.
Yet, by December 31, 2024, the cash conversion cycle increased slightly to 77.57 days compared to the previous year. This might imply potential challenges in managing cash flow and working capital efficiency for the company.
Overall, Hershey Co should continue to monitor and potentially improve its cash conversion cycle to ensure optimal management of its working capital and financial resources.