Lamb Weston Holdings Inc (LW)
Quick ratio
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 71,400 | 304,800 | 525,000 | 783,500 | 1,364,000 |
| Short-term investments | US$ in thousands | — | — | — | 310,000 | — |
| Receivables | US$ in thousands | 743,600 | 724,200 | 447,300 | 477,900 | 342,100 |
| Total current liabilities | US$ in thousands | 1,624,100 | 1,360,200 | 699,100 | 618,200 | 1,024,900 |
| Quick ratio | 0.50 | 0.76 | 1.39 | 2.54 | 1.66 |
May 26, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($71,400K
+ $—K
+ $743,600K)
÷ $1,624,100K
= 0.50
The quick ratio of Lamb Weston Holdings Inc has been fluctuating over the past five years, indicating varying levels of liquidity. In 2024, the quick ratio was 0.50, suggesting that the company may face challenges in meeting its short-term obligations with its most liquid assets. This represents a significant decrease from the previous year's ratio of 0.76.
Comparing this to the quick ratios of 1.39 in 2022, 2.54 in 2021, and 1.66 in 2020, it is evident that the company had stronger liquidity positions in those years. A quick ratio of less than 1 may raise concerns about the company's ability to cover its short-term liabilities without relying on selling inventory.
Overall, the downward trend in the quick ratio from 2020 to 2024 indicates a potential decrease in the company's liquidity position and warrants further investigation into its management of current assets and liabilities to ensure financial stability in the future.
Peer comparison
May 26, 2024