Performance Food Group Co (PFGC)

The analysis of Performance Food Group Co’s liquidity ratios over the period from June 30, 2021, to June 30, 2025, reveals the company's evolving capacity to meet its short-term obligations.

The Current Ratio demonstrates a general upward trend, increasing from 1.42 in 2021 to a peak of 1.71 in 2023. This indicates an improving ability to cover current liabilities with current assets during this period. Subsequently, the ratio shows a modest decline to 1.64 in 2024 and further to 1.58 in 2025, suggesting a slight reduction in liquidity cushion but still reflecting a comfortable margin above the generally accepted benchmark of 1.0, which indicates adequate liquidity.

The Quick Ratio exhibits a relatively stable pattern with minor fluctuations. It remains steady at approximately 0.65 in 2021 and 2022, increases slightly to 0.69 in 2023 and stays at that level through 2024 before decreasing marginally to 0.64 in 2025. This ratio supremacy over the current ratio implies that a substantial portion of the company’s liquid assets, excluding inventories, are available to meet short-term liabilities. The consistently high Quick Ratio, close to or above 0.65, suggests prudent management of liquid assets relative to current liabilities.

The Cash Ratio remains relatively low throughout the period, starting at 0.00 in 2021 and gradually increasing to 0.02 in 2025. This indicates that the company's cash holdings are a minimal component of its current liabilities and reflect a typical pattern for companies with substantial receivables and inventory, where cash alone accounts for a small fraction of liquid assets needed for immediate obligations.

Overall, the company's liquidity ratios demonstrate a stable and generally healthy short-term financial position. The upward trend in the current and quick ratios through 2023 suggests improved liquidity, while the subsequent slight declines may warrant continued monitoring but do not indicate immediate liquidity concerns. The low cash ratio underscores reliance on receivables, inventory, and other current assets, consistent with the industry norms.

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Additional liquidity measure

The cash conversion cycle (CCC) of Performance Food Group Co over the analyzed period demonstrates a generally stable but slightly fluctuating trend. As of June 30, 2021, the CCC was calculated at 20.42 days, indicating the average time span from the outlay of cash for inventory purchases to the collection of cash from sales was approximately three weeks. This metric increased modestly to 23.74 days by June 30, 2022, reflecting a slight elongation in the company's working capital cycle.

Subsequently, the CCC experienced a minor decrease to 22.26 days as of June 30, 2023, suggesting an improvement in the efficiency of cash flow management or shorter inventory or receivables periods during that year. The trend continued with a further reduction to 21.06 days by June 30, 2024, implying an enhancement in operational efficiency and possibly faster inventory turnover or receivables collection.

By June 30, 2025, the CCC remained relatively stable at 21.05 days, indicating that the company's working capital cycle has largely stabilized around the mid-20-day range over the recent years. Overall, the company's cash conversion cycle has maintained a relatively narrow and consistent period, reflecting steady operational efficiencies and effective working capital management. The slight fluctuations observed suggest minor improvements in operational processes but do not denote significant structural changes over the period.