Hershey Co (HSY)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.97 | 1.09 | 1.06 | 0.83 | 0.80 | 0.79 | 0.74 | 0.96 | 0.90 | 1.44 | 1.40 | 1.61 | 1.57 | 1.44 | 1.31 | 0.99 | 1.05 | 0.80 | 0.88 | 0.92 |
| Quick ratio | 0.41 | 0.54 | 0.44 | 0.14 | 0.36 | 0.10 | 0.10 | 0.13 | 0.40 | 0.35 | 0.27 | 0.64 | 0.60 | 0.54 | 0.53 | 0.38 | 0.25 | 0.10 | 0.15 | 0.19 |
| Cash ratio | 0.13 | 0.16 | 0.16 | 0.14 | 0.14 | 0.10 | 0.10 | 0.13 | 0.13 | 0.35 | 0.27 | 0.64 | 0.60 | 0.54 | 0.53 | 0.38 | 0.25 | 0.10 | 0.15 | 0.19 |
The liquidity ratios of Hershey Company, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations.
- Current Ratio: Hershey's current ratio has fluctuated over the quarters, ranging from a low of 0.74 to a high of 1.09. The current ratio measures the company's ability to cover its short-term liabilities with its current assets. A ratio below 1 indicates potential liquidity issues, and Hershey's ratios have been below 1 in most quarters, suggesting a potential strain on its short-term liquidity.
- Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Hershey's quick ratio has also varied, with values ranging from 0.37 to 0.63. Similar to the current ratio, the quick ratios indicate that Hershey may have difficulty meeting its short-term obligations without relying on inventory.
- Cash Ratio: The cash ratio focuses solely on a company's ability to cover immediate liabilities with cash and cash equivalents. Hershey's cash ratio has shown some improvement over the quarters, ranging from 0.17 to 0.27. While the cash ratio provides a more conservative view of liquidity, Hershey's ratios still suggest some limitations in immediate liquidity despite the improvement.
Overall, the liquidity ratios of Hershey Company portray a mixed picture, with indications of potential liquidity challenges given the consistently low current and quick ratios. It is important for investors and stakeholders to monitor these ratios closely to assess Hershey's ability to meet its short-term financial obligations.
See also:
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 38.51 | 49.07 | 43.01 | 8.13 | 34.12 | 12.19 | 15.85 | 10.39 | 42.82 | 20.34 | 28.59 | 25.79 | 31.52 | 30.73 | 38.65 | 24.85 | 22.12 | 35.68 | 40.81 | 24.43 |
The cash conversion cycle of Hershey Company has shown fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle decreased to 42.01 days compared to the previous quarter, suggesting an improvement in the company's efficiency in managing cash flows.
However, in Q3 2023, the cash conversion cycle increased to 61.39 days, indicating a slower conversion of inventory and receivables into cash during that period. This was a significant increase from the previous quarter and may raise concerns about the company's liquidity and operational efficiency during that period.
In Q2 2023, the cash conversion cycle was 56.76 days, reflecting a slightly longer time taken by Hershey Company to convert its investments in inventory and accounts receivable into cash. This metric improved in Q1 2023 to 46.80 days, indicating a more efficient management of working capital during that period.
Comparing the current data with the same quarter of the previous year, Q4 2022 had a cash conversion cycle of 37.40 days, showing a slight increase over time. Q3 and Q2 of 2022 had cash conversion cycles of 50.76 days and 46.98 days, respectively, while Q1 2022 had a cycle of 48.70 days.
Overall, fluctuations in the cash conversion cycle can provide insights into Hershey Company's efficiency in managing its working capital and converting investments into cash. It is essential for the company to monitor and analyze these trends to ensure optimal cash flow management and operational performance.