Hawkins Inc (HWKN)

Hawkins Inc's liquidity ratios provide insight into its ability to meet short-term obligations and manage operating expenses effectively. The current ratio has decreased over the past five years, from 2.11 in 2020 to 1.96 in 2024, indicating a slight decline in its ability to cover current liabilities with current assets. However, the current ratio remains above 1, suggesting that Hawkins Inc can still meet its short-term obligations.

The quick ratio, also known as the acid-test ratio, has followed a similar trend, decreasing from 1.15 in 2020 to 1.18 in 2024. This ratio excludes inventory from current assets, providing a more conservative measure of liquidity. The decreasing trend indicates that Hawkins Inc has reduced its ability to cover immediate liabilities with its most liquid assets.

The cash ratio, which measures the proportion of cash and cash equivalents to current liabilities, has fluctuated over the years but remains relatively low compared to the current and quick ratios. The cash ratio decreased from 0.07 in 2020 to 0.03 in 2022 before slightly increasing to 0.07 in 2024. This suggests that Hawkins Inc may have limited cash reserves available to cover its short-term obligations.

Overall, Hawkins Inc's liquidity ratios show a mixed performance, with a slight decline in its ability to cover short-term obligations. It may be advisable for the company to monitor its liquidity closely and consider strategies to improve its liquidity position, such as managing inventory levels more efficiently or increasing cash reserves.

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Additional liquidity measure

The cash conversion cycle of Hawkins Inc has shown fluctuations over the past five years. In the most recent fiscal year ending March 31, 2024, the company's cash conversion cycle decreased to 54.62 days compared to the previous year's 67.08 days. This indicates that the company improved its efficiency in managing its cash flow and working capital.

Looking back over the five-year period, it is evident that Hawkins Inc has been able to effectively manage its cash conversion cycle, with some fluctuations in performance. The cycle peaked at 76.00 days in March 2021 but has generally trended downwards since then.

The cash conversion cycle is a key metric for assessing how efficiently a company is able to convert its resources into cash. A lower cycle indicates that the company is able to collect payments from customers, manage its inventory, and pay suppliers more quickly, leading to better liquidity and financial performance.

Overall, the trend of decreasing cash conversion cycle for Hawkins Inc over the past five years reflects positively on the company's ability to manage its working capital effectively and optimize its cash flow operations.