Keurig Dr Pepper Inc (KDP)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.49 | 0.53 | 0.51 | 0.51 | 0.38 | 0.39 | 0.39 | 0.39 | 0.47 | 0.60 | 0.56 | 0.54 | 0.47 | 0.41 | 0.38 | 0.37 | 0.31 | 0.33 | 0.31 | 0.33 |
| Quick ratio | 0.28 | 0.27 | 0.26 | 0.25 | 0.20 | 0.18 | 0.19 | 0.20 | 0.28 | 0.35 | 0.30 | 0.30 | 0.29 | 0.22 | 0.19 | 0.22 | 0.19 | 0.19 | 0.17 | 0.19 |
| Cash ratio | 0.06 | 0.06 | 0.06 | 0.05 | 0.03 | 0.02 | 0.03 | 0.02 | 0.07 | 0.13 | 0.08 | 0.09 | 0.10 | 0.03 | 0.02 | 0.06 | 0.04 | 0.04 | 0.02 | 0.03 |
Keurig Dr Pepper Inc's liquidity ratios provide insights into its ability to meet short-term financial obligations. The company's current ratio has shown fluctuations over the past few years but has generally been below 1, indicating potential challenges in meeting current liabilities with current assets. However, there has been an improving trend since March 31, 2021, reaching a high of 0.60 on September 30, 2022, before decreasing slightly to 0.49 on December 31, 2024.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown variability. It has generally been below 1, suggesting a reliance on inventory to meet short-term obligations. There was an improvement in the quick ratio from December 31, 2021, to September 30, 2022, but it decreased slightly to 0.28 on December 31, 2022, before trending upwards to 0.28 on December 31, 2024.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has also fluctuated over time. The ratio indicates the company's ability to settle immediate liabilities with cash on hand. Keurig Dr Pepper Inc's cash ratio improved from December 31, 2021, to September 30, 2022, but declined slightly to 0.06 on December 31, 2024.
Overall, while there have been fluctuations in Keurig Dr Pepper Inc's liquidity ratios, the company has generally shown improvement in its ability to meet short-term obligations over the years, as indicated by the upward trends in the current ratio, quick ratio, and cash ratio since 2021. The company may still need to carefully manage its working capital to ensure continued liquidity strength in the future.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -6.28 | -13.32 | -17.45 | -23.43 | -35.79 | -45.43 | -55.82 | -60.59 | -70.47 | -73.55 | -80.80 | -81.47 | -83.65 | -76.94 | -80.26 | -78.53 | -76.38 | -67.48 | -65.64 | -63.00 |
Keurig Dr Pepper Inc's cash conversion cycle measures how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales. Looking at the trend over the provided period, from March 31, 2020, to December 31, 2024, we observe a consistent negative cash conversion cycle. This trend indicates that the company is efficient in managing its working capital, as it takes fewer days to convert its resources into cash.
The cycle started at around -63.00 days in March 2020 and generally decreased over time, reaching its lowest point of -6.28 days by December 31, 2024. This improvement suggests that Keurig Dr Pepper Inc has been able to streamline its operations, reduce inventory and receivable holding periods, and accelerate its collection of cash from customers.
Overall, a negative cash conversion cycle indicates that the company is able to generate cash quickly, which could be a positive sign of efficient working capital management and liquidity. However, it's essential to also consider the company's overall financial health and other relevant metrics to get a complete picture of its performance and sustainability.