Pilgrims Pride Corp (PPC)

Pilgrim`s Pride Corp.'s liquidity ratios have shown some fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has improved from 1.38 in 2021 to 1.68 in 2023. This indicates that the company's current assets have increased relative to its current liabilities, providing a stronger buffer to meet its short-term obligations.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Pilgrim`s Pride Corp.'s quick ratio has also shown an improvement over the years, from 0.71 in 2021 to 0.88 in 2023. This suggests that the company has a better ability to meet its short-term obligations using its most liquid assets.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, has also exhibited variability for Pilgrim`s Pride Corp. over the past five years. The ratio has increased from 0.24 in 2019 to 0.36 in 2023. This indicates that the company's cash reserves have improved relative to its current liabilities, enhancing its ability to cover immediate obligations with cash on hand.

Overall, the trend in Pilgrim`s Pride Corp.'s liquidity ratios points towards an improvement in its short-term financial strength and ability to meet obligations. However, fluctuations in these ratios over the years suggest that the company should continue to monitor and manage its liquidity position effectively to ensure sustainable financial health.

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Additional liquidity measure

The cash conversion cycle of Pilgrim's Pride Corp. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 41.19 days from the previous year's 37.52 days. This suggests that it took the company longer to convert its investments in inventory into cash receipts in 2023.

Comparing to 2021, the cash conversion cycle increased by 8.57 days, indicating that the company experienced challenges in managing its working capital efficiently in 2023.

In 2020, there was a slight improvement in the cash conversion cycle compared to 2021, with a decrease to 38.37 days. This might suggest that the company made some improvements in managing its inventory and accounts receivable during this period.

In 2019, the cash conversion cycle was 42.77 days, which was higher than 2023, indicating that the company has managed to improve its working capital management over the past four years.

Overall, Pilgrim's Pride Corp. has experienced fluctuations in its cash conversion cycle over the past five years, with the most recent year showing an increase. Further analysis and comparison with industry benchmarks may provide more insights into the company's efficiency in managing its working capital.