McCormick & Company Incorporated (MKC)
Quick ratio
| Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 186,100 | 200,800 | 166,300 | 178,000 | 166,600 | 154,700 | 127,400 | 356,800 | 334,000 | 343,900 | 325,800 | 338,400 | 351,700 | 312,600 | 291,800 | 256,100 | 423,600 | 221,000 | 185,000 | 170,800 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | -429,100 | — | — | — |
| Receivables | US$ in thousands | 587,400 | 660,900 | 598,500 | 567,500 | 587,500 | 624,500 | 557,200 | 571,000 | 573,700 | 565,800 | 493,100 | 516,700 | 549,500 | 541,000 | 500,400 | 515,900 | 528,500 | 496,500 | 494,300 | 409,900 |
| Total current liabilities | US$ in thousands | 2,882,800 | 3,144,300 | 2,984,300 | 2,973,800 | 3,098,900 | 3,171,000 | 2,487,100 | 3,321,000 | 3,432,400 | 3,140,400 | 3,133,000 | 3,076,700 | 3,223,800 | 3,161,300 | 2,381,200 | 2,423,700 | 3,046,500 | 1,953,500 | 1,582,300 | 2,072,400 |
| Quick ratio | 0.27 | 0.27 | 0.26 | 0.25 | 0.24 | 0.25 | 0.28 | 0.28 | 0.26 | 0.29 | 0.26 | 0.28 | 0.28 | 0.27 | 0.33 | 0.32 | 0.17 | 0.37 | 0.43 | 0.28 |
November 30, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($186,100K
+ $—K
+ $587,400K)
÷ $2,882,800K
= 0.27
The quick ratio for McCormick & Company Incorporated has been fluctuating over the periods analyzed. It demonstrates the company's ability to cover its short-term liabilities with its most liquid assets. The quick ratio ranged from a low of 0.17 on November 30, 2020, indicating a potential liquidity issue, to a high of 0.43 on May 31, 2020, showing improved liquidity. Despite some variability, the quick ratio generally stayed within a relatively narrow range between 0.24 and 0.43 over the periods examined.
The quick ratio reveals that, on average, for every dollar of current liabilities owed by McCormick & Company, it had between $0.24 to $0.43 of highly liquid assets readily available to cover those obligations. Maintaining a quick ratio above 1.0 is considered healthy, as it signifies that the company can meet its short-term debt obligations comfortably. However, with a quick ratio consistently below 1.0 during the periods in question, it suggests that McCormick & Company may have been relying more on less liquid assets to meet its short-term obligations.
Further analysis is recommended to understand the reasons for the fluctuation in the quick ratio and assess the overall liquidity position of McCormick & Company Incorporated more comprehensively.