Post Holdings Inc (POST)

The liquidity ratios of Post Holdings Inc have fluctuated over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, decreased from 2.70 in 2022 to 1.84 in 2023. This suggests a reduction in the company's short-term liquidity and may indicate potential difficulties in meeting its immediate liabilities.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also declined from 1.61 in 2022 to 0.83 in 2023. This indicates a significant decrease in the company's ability to cover its short-term liabilities using its most liquid assets.

Similarly, the cash ratio, which focuses solely on the company's cash and cash equivalents to cover current liabilities, experienced a notable decrease from 0.95 in 2022 to 0.19 in 2023.

These declining trends in liquidity ratios highlight a potential concern for Post Holdings Inc's short-term financial health. Further analysis of the company's cash management and working capital policies may be required to mitigate liquidity risks and ensure its ability to meet its financial obligations.

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Additional liquidity measure

The cash conversion cycle of Post Holdings Inc has shown fluctuations over the last five years. In 2023, the cash conversion cycle increased to 56.93 days from 46.41 days in 2022, indicating a decrease in efficiency in converting its investments in inventory and other resources into cash. This can be attributed to a longer period of inventory holding, longer accounts receivable collection period, or a shorter accounts payable payment period.

In 2021, the cash conversion cycle was 42.59 days, showing an improvement from the previous year. This suggests that the company was able to manage its inventory, accounts receivable, and accounts payable more effectively. However, in 2020 and 2019, the cycle increased to 49.95 days and 49.18 days, respectively, indicating less efficiency in managing working capital.

Overall, fluctuations in the cash conversion cycle indicate varying levels of efficiency in managing working capital and liquidity over the years. Further analysis of inventory management, accounts receivable collection, and accounts payable policies can provide deeper insights into the company's operational efficiency.