Monster Beverage Corp (MNST)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 3.32 3.13 3.41 4.91 4.81 4.51 4.86 4.46 4.76 4.19 4.29 4.54 4.85 4.70 4.45 4.35 4.19 3.65 3.51 2.92
Quick ratio 1.40 1.31 1.35 2.90 2.80 2.55 2.83 2.57 2.66 2.36 2.26 2.62 3.19 3.15 2.88 2.74 2.75 2.16 1.74 1.33
Cash ratio 1.40 1.31 1.35 2.90 2.80 2.55 2.83 2.57 2.66 2.36 2.26 2.62 3.19 3.15 2.88 2.74 2.75 2.16 1.74 1.33

Monster Beverage Corp's liquidity ratios have shown a strong trend of improvement over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has consistently increased from 2.92 in March 31, 2020, to 4.76 in December 31, 2022. Although there was a slight dip in the ratio to 3.13 in September 30, 2024, it bounced back to 3.32 by December 31, 2024.

The quick ratio, a stricter measure of liquidity that excludes inventory from current assets, also exhibited a positive trend. It increased steadily from 1.33 in March 31, 2020, to 2.80 by December 31, 2023, before dipping to 1.40 by December 31, 2024.

The cash ratio, which indicates the company's ability to cover its current liabilities with its most liquid assets, showed a similar pattern of improvement. It rose consistently from 1.33 in March 31, 2020, to 2.90 by March 31, 2024, before falling to 1.40 by December 31, 2024.

Overall, Monster Beverage Corp's liquidity ratios demonstrate a healthy liquidity position, with ample current assets to cover short-term obligations. However, the slight fluctuations in the quick and cash ratios towards the end of the period may warrant further investigation to ensure sustained liquidity strength.

See also:

Monster Beverage Corp Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 78.12 82.07 89.13 100.38 105.97 98.24 96.56 103.56 108.88 102.76 111.65 113.28 89.02 75.46 64.42 67.96 64.85 65.57 72.00 74.13

The cash conversion cycle of Monster Beverage Corp measures the efficiency of the company in managing its working capital by evaluating the time it takes to convert its resources invested in inventory into cash from sales.

Analyzing the trend in the cash conversion cycle over the past few quarters, the company started with a cycle of 74.13 days on March 31, 2020, and managed to reduce it consistently until December 31, 2021, reaching 64.85 days. A decrease in the cash conversion cycle indicates improved efficiency in managing working capital.

However, from March 31, 2022, there was a significant increase in the cash conversion cycle, reaching 113.28 days by that date, and the trend remained elevated in the subsequent quarters, signaling potential concerns in working capital management.

The spike in the cash conversion cycle could indicate issues with inventory management, delayed collections from customers, or a slowdown in sales. Monitoring and analyzing the factors contributing to this increase would be crucial to address potential liquidity and operational efficiency challenges that might arise from a longer cash conversion cycle.

Overall, understanding and managing the cash conversion cycle is essential for Monster Beverage Corp to optimize its working capital, improve cash flow, and sustain operational efficiency in the long term.