Kraft Heinz Co (KHC)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.06 | 0.99 | 0.87 | 0.99 | 1.34 |
| Quick ratio | 0.48 | 0.44 | 0.35 | 0.60 | 0.68 |
| Cash ratio | 0.18 | 0.17 | 0.12 | 0.38 | 0.42 |
Based on the provided liquidity ratios for Kraft Heinz Co, we can observe the following trends:
1. Current Ratio: The company's current ratio has fluctuated over the years, starting at 1.34 in 2020, decreasing to 0.99 in 2021, dipping further to 0.87 in 2022, then recovering to 0.99 in 2023, and increasing to 1.06 in 2024. While the ratios in the later years show improvement, the company's ability to meet its short-term obligations with its current assets remains somewhat volatile.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, indicates the company's ability to cover immediate liabilities with its most liquid assets. Over the years, Kraft Heinz Co experienced a decline in its quick ratio from 0.68 in 2020 to 0.48 in 2024. This suggests a decreasing ability to pay off current liabilities without relying on inventory, which may raise concerns about short-term liquidity management.
3. Cash Ratio: The cash ratio reflects the company's ability to cover its current liabilities with cash and cash equivalents. Kraft Heinz Co's cash ratio declined from 0.42 in 2020 to 0.18 in 2024, indicating a decreasing reliance on cash reserves to meet short-term obligations. This trend may imply a shift in the company's cash management strategy or a decrease in available cash resources.
Overall, the liquidity ratios for Kraft Heinz Co demonstrate varying levels of liquidity and short-term solvency over the analyzed period. The company experienced fluctuations in its ability to meet immediate payment obligations with its current assets, especially noticeable in the decreasing quick and cash ratios. It would be crucial for stakeholders to monitor these ratios closely to assess the company's liquidity position and financial health.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 19.79 | 14.01 | 11.87 | 0.33 | 10.29 |
The cash conversion cycle of Kraft Heinz Co has fluctuated over the past five years. As of December 31, 2020, the company's cash conversion cycle was 10.29 days, indicating a relatively efficient management of its working capital. However, by the end of 2021, the cash conversion cycle significantly improved to 0.33 days, suggesting that the company was able to convert its investments in raw materials and inventory into cash more rapidly.
Subsequently, there was a notable increase in the cash conversion cycle to 11.87 days as of December 31, 2022, followed by a further increase to 14.01 days by the end of 2023. This extension in the cycle implies that the company took longer to convert its investments into cash, potentially signaling challenges in managing its working capital effectively during those periods.
By December 31, 2024, Kraft Heinz Co's cash conversion cycle increased to 19.79 days, which may raise concerns about its ability to efficiently convert its assets into cash flow. Overall, the fluctuation in the cash conversion cycle indicates varying degrees of efficiency in the company's working capital management over the five-year period.