McCormick & Company Incorporated (MKC)
Cash ratio
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 166,600 | 334,000 | 351,700 | 423,600 | 155,400 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 3,098,900 | 3,432,400 | 3,223,800 | 3,046,500 | 2,154,400 |
| Cash ratio | 0.05 | 0.10 | 0.11 | 0.14 | 0.07 |
November 30, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($166,600K
+ $—K)
÷ $3,098,900K
= 0.05
The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, for McCormick & Co., Inc. has exhibited fluctuations over the past five years.
In November 2023, the cash ratio decreased to 0.09 from 0.14 in the previous year. This decline indicates that the company's ability to cover its current liabilities with its cash and cash equivalents has weakened. It could be a cause for concern as it may signify a reduction in the company's short-term liquidity.
Comparing the current ratio with 2021, it remained stable at 0.14. While the ratio showed a slight decline from 2020 to 2021, it then stabilized in 2021 and 2022, suggesting consistent short-term liquidity levels during those years.
The highest cash ratio of 0.17 was observed in November 2020, indicating a stronger ability to cover current liabilities with available cash and cash equivalents. However, this was followed by a decrease in 2019 to 0.11, reflecting a temporary dip in short-term liquidity.
Overall, the company's cash ratio has undergone fluctuations, with a decrease in 2023 potentially signaling a need for careful monitoring of the company's liquidity position.