J & J Snack Foods Corp (JJSF)
Cash ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 73,394 | 49,581 | 35,181 | 283,192 | 195,809 |
| Short-term investments | US$ in thousands | — | — | 9,719 | 18,064 | 51,151 |
| Total current liabilities | US$ in thousands | 174,073 | 174,944 | 181,839 | 167,629 | 134,126 |
| Cash ratio | 0.42 | 0.28 | 0.25 | 1.80 | 1.84 |
September 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($73,394K
+ $—K)
÷ $174,073K
= 0.42
The cash ratio measures a company's ability to cover its short-term liabilities using its available cash and cash equivalents. A higher cash ratio indicates a stronger liquidity position as it signifies the company has more cash on hand relative to its current liabilities.
Looking at J & J Snack Foods Corp's cash ratio over the past five years, we can observe fluctuations in the ratio. In 2020 and 2021, the company had very high cash ratios of 1.84 and 1.80, respectively, indicating a robust ability to cover its short-term obligations with its cash reserves during those years.
However, the cash ratio dropped significantly in the following years, reaching 0.25 in 2022, 0.28 in 2023, and 0.42 in 2024. This downward trend suggests that the company may have experienced changes in its cash position or short-term liabilities that impacted its liquidity position during those years.
It is important to note that while the recent cash ratios are lower compared to 2020 and 2021, a cash ratio above 1 is generally considered healthy, indicating that the company has more than enough cash to cover its short-term obligations. Therefore, despite the fluctuations, J & J Snack Foods Corp appears to have maintained a satisfactory liquidity position overall. Further analysis of the company's cash flow and working capital management practices may provide additional insights into its liquidity performance.