Kellanova (K)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.81 | 0.66 | 0.66 | 0.64 | 0.66 |
| Quick ratio | 0.15 | 0.06 | 0.05 | 0.06 | 0.08 |
| Cash ratio | 0.15 | 0.06 | 0.05 | 0.06 | 0.08 |
The liquidity ratios of Kellanova indicate its ability to meet short-term obligations and cover immediate financial needs.
1. Current Ratio: This ratio measures the company's ability to pay its short-term liabilities with its short-term assets. Kellanova's current ratio has been consistently low, ranging from 0.64 to 0.81 over the years. A current ratio below 1 suggests that the company may have difficulties meeting its short-term obligations using its current assets alone.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Kellanova's quick ratio has shown a declining trend, ranging from 0.05 to 0.15. A quick ratio below 1 indicates that the company may struggle to meet its immediate liabilities without relying on selling off inventory.
3. Cash Ratio: The cash ratio assesses the extent to which a company can cover its current liabilities with cash and cash equivalents. Kellanova's cash ratio has remained consistently low, ranging from 0.06 to 0.15. A cash ratio below 1 signals that the company may have limited cash reserves to cover its short-term obligations without relying on other current assets.
In summary, Kellanova's liquidity ratios suggest that the company may face challenges in meeting its short-term financial obligations using its current assets alone. It may need to enhance its liquidity position by either increasing cash reserves or improving the management of current assets to ensure adequate liquidity in the future.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 51.83 | 51.33 | 55.27 | 64.35 | 51.83 |
The cash conversion cycle for Kellanova has fluctuated over the past five years. In 2020, the company had a cash conversion cycle of 51.83 days, which increased to 64.35 days in 2021. However, in 2022, the cycle decreased to 55.27 days before further decreasing to 51.33 days in 2023. Interestingly, by the end of 2024, Kellanova's cash conversion cycle reverted back to 51.83 days, the same level as in 2020.
This indicates that Kellanova has managed to effectively manage its working capital and improve its cash conversion efficiency in recent years, particularly in 2023 when the cycle reduced significantly. However, the slight increase in the cash conversion cycle in 2021 suggests a potential period of challenges in managing cash flows efficiently. Overall, the trend in the cash conversion cycle shows that Kellanova has taken steps to optimize its cash management and operational efficiency over the analyzed period.