Lamb Weston Holdings Inc (LW)
Quick ratio
| May 31, 2025 | May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 70,700 | 71,400 | 71,400 | 304,800 | 304,800 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 781,600 | 743,600 | 743,600 | 724,200 | 724,200 |
| Total current liabilities | US$ in thousands | 1,476,000 | 1,624,100 | 1,624,100 | 1,360,200 | 1,360,200 |
| Quick ratio | 0.58 | 0.50 | 0.50 | 0.76 | 0.76 |
May 31, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($70,700K
+ $—K
+ $781,600K)
÷ $1,476,000K
= 0.58
The quick ratio of Lamb Weston Holdings Inc. exhibits notable fluctuations across the provided dates, reflecting changes in the company's short-term liquidity position. As of May 28 and May 31, 2023, the quick ratio was consistent at 0.76, indicating that the company's most liquid assets, excluding inventories, covered approximately 76% of its current liabilities. This suggests a relatively comfortable liquidity buffer at that time.
By May 26 and May 31, 2024, the quick ratio decreased significantly to 0.50, implying that the liquidity position weakened, with liquid assets covering only half of the current liabilities. This reduction may indicate a decline in cash or liquid assets relative to short-term obligations, potentially signaling increased liquidity risk or changes in the company's asset management, such as higher current liabilities or reduced availability of liquid assets.
Looking ahead to May 31, 2025, the quick ratio increased slightly to 0.58, representing a modest improvement in liquidity but still remaining below the prior year’s levels. The incremental rise suggests some improvement in the company’s liquid asset position relative to current liabilities, yet it continues to reflect a situation where quick assets do not fully cover current obligations, which could warrant further liquidity management considerations.
Overall, the trend from 2023 through 2025 indicates a period of diminished immediate liquidity risk from 2023 to 2024, followed by a slight recovery in 2025. Nevertheless, the ratios remain below the benchmark of 1.0, indicating that Lamb Weston Holdings Inc. relies significantly on less liquid assets or its ability to generate cash flows to meet short-term liabilities. These fluctuations emphasize the importance of ongoing liquidity management and monitoring of liquid assets relative to current liabilities over time.
Peer comparison
May 31, 2025