J & J Snack Foods Corp (JJSF)

The liquidity ratios of J & J Snack Foods Corp over the past five years indicate the company's ability to meet its short-term obligations and manage its current assets efficiently.

The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has shown a slight increasing trend from 2.45 in 2022 to 2.59 in 2024. This indicates that the company has improved its ability to pay off its short-term obligations using current assets.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. J & J Snack Foods Corp's quick ratio has also shown a gradual increase from 1.39 in 2022 to 1.51 in 2024. This suggests that the company has a sufficient level of liquid assets to cover its short-term liabilities without relying on inventory.

The cash ratio, which is the most conservative measure of liquidity, focuses solely on the company's ability to cover short-term liabilities with cash and cash equivalents. J & J Snack Foods Corp's cash ratio has fluctuated over the past five years, decreasing from 1.84 in 2020 to 0.42 in 2024. This indicates that the company may have reduced its cash reserves relative to its short-term obligations, which is something to monitor.

Overall, the liquidity ratios of J & J Snack Foods Corp demonstrate a generally healthy financial position with a strong ability to meet short-term obligations. The increasing trend in current and quick ratios indicates improved liquidity management, although the fluctuation in the cash ratio warrants further attention to ensure adequate cash reserves for unforeseen circumstances.

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Additional liquidity measure

The cash conversion cycle of J & J Snack Foods Corp has fluctuated over the past five years. In the most recent fiscal year ending on September 30, 2024, the company's cash conversion cycle was at 67.60 days, showing an improvement compared to the previous year's figure of 69.37 days. However, it is worth noting that the cash conversion cycle had reached its peak in the fiscal year ending on September 30, 2022, at 77.74 days.

A shorter cash conversion cycle indicates that the company is able to convert its inventory into cash more quickly, which can be a positive sign of efficient operations. On the other hand, a longer cash conversion cycle may suggest inefficiencies in managing inventory, receivables, and payables.

Overall, the trend in J & J Snack Foods Corp's cash conversion cycle seems to have improved slightly in the most recent year, but it is important to monitor this metric closely to ensure efficient management of working capital and operations.