Post Holdings Inc (POST)

Post Holdings Inc's liquidity ratios have shown fluctuations over the past five years, as indicated by its current ratio, quick ratio, and cash ratio.

The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. Post Holdings Inc's current ratio has been relatively stable, ranging from 1.84 to 2.70, with a notable decrease in 2023 and a subsequent increase in 2024. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally considered favorable.

The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. Post Holdings Inc's quick ratio has also fluctuated, ranging from 0.77 to 1.68. The company's quick ratio improved in 2024 compared to the previous year, indicating a higher level of liquidity to cover its short-term obligations.

The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, has shown significant variability for Post Holdings Inc. The cash ratio ranged from 0.13 to 1.23 over the five-year period, with a substantial improvement in 2024 compared to the previous year. A higher cash ratio is generally preferred as it indicates a greater ability to meet short-term obligations using cash resources.

Overall, while there have been fluctuations in Post Holdings Inc's liquidity ratios over the years, the company has generally maintained a strong liquidity position with current, quick, and cash ratios above 1 in most instances. However, management should continue to monitor these ratios to ensure the company's ability to meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Post Holdings Inc has shown fluctuations over the past five years. In 2024, the cash conversion cycle decreased to 44.42 days from 56.84 days in 2023, indicating a more efficient management of cash flow and working capital. This could be attributed to improved inventory management or faster collection of receivables.

Comparing to the previous years, the 2024 cash conversion cycle is lower than 2021 and 2020, suggesting that Post Holdings Inc has been able to convert its inventory into cash more quickly, resulting in a shorter operating cycle.

However, the 2024 cash conversion cycle is slightly higher than in 2022, which could indicate a potential slowdown in converting sales into cash or an increase in the time taken to pay suppliers.

Overall, monitoring and managing the cash conversion cycle is crucial for Post Holdings Inc to ensure efficient utilization of working capital and maintain a healthy financial position.