Performance Food Group Co (PFGC)

Performance Food Group Co has shown improvement in its current ratio over the past few years, indicating a stronger ability to cover its short-term obligations with its current assets. The current ratio has increased from 1.32 in 2020 to 1.64 in 2024, peaking at 1.71 in 2023.

However, the quick ratio and cash ratio have remained consistently low over the same period, hovering at around 0.01. This suggests that the company may have limited ability to meet its immediate liabilities with its most liquid assets, such as cash and equivalents.

Overall, while the current ratio reflects a positive trend in Performance Food Group Co's liquidity position, the low quick and cash ratios highlight potential challenges in meeting short-term obligations without relying on current assets that may not be as easily convertible to cash.

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Additional liquidity measure

Performance Food Group Co's cash conversion cycle has demonstrated some variability over the past five years. The cycle peaked at 27.42 days on June 30, 2022, but then decreased to 23.40 days by June 30, 2024. This downward trend indicates an improvement in the company's efficiency in converting its investments in inventory into cash.

Overall, the company has managed to maintain a relatively low cash conversion cycle, with an average of approximately 25.10 days over the five-year period. This suggests that Performance Food Group Co is effective in managing its working capital, as it takes approximately 25 days on average for the company to convert its investments in inventory and accounts receivable into cash.

A low cash conversion cycle is generally favorable, as it indicates that the company is able to efficiently manage its operating cycle and generate cash flows from its sales relatively quickly. This can contribute to improved liquidity and financial stability for Performance Food Group Co.