Boston Beer Company Inc (SAM)

The liquidity ratios of Boston Beer Company Inc have shown a positive trend 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 steadily increased from 1.21 in 2019 to 2.25 in 2023. This indicates that the company has improved its liquidity position and is better positioned 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. Boston Beer Company's quick ratio has also shown an improving trend, increasing from 0.56 in 2019 to 1.64 in 2023. This indicates that the company has significant liquid assets to cover its short-term liabilities in case of a sudden need for cash.

The cash ratio, which is the most conservative measure of liquidity as it only includes cash and cash equivalents in the numerator, has also shown significant improvement over the years. The cash ratio has increased from 0.20 in 2019 to 1.34 in 2023, indicating that Boston Beer Company has a strong ability to meet its short-term obligations with its cash reserves.

Overall, the liquidity ratios of Boston Beer Company Inc demonstrate a strong and improving liquidity position, with the company having sufficient liquid assets to cover its short-term liabilities. This suggests that the company is in a good financial position to handle any unforeseen challenges or fluctuations in its operating environment.

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Additional liquidity measure

The cash conversion cycle of Boston Beer Company Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle was 21.49 days, indicating that it took on average 21.49 days to convert its investments in inventory and other resources into cash received from sales. This represents an improvement from the previous year where the cycle was 30.74 days, suggesting that the company managed its working capital more efficiently in 2023.

Comparing to 2021 and 2019, the company also showed improvements in managing its cash conversion cycle. In 2021, the cycle was 37.55 days, and in 2019, it was 35.68 days. The downward trend from 2019 to 2023 indicates that Boston Beer Company Inc has been able to optimize its operations to release cash more quickly, potentially through better inventory management and collection of receivables.

However, a slight increase in the cash conversion cycle from 2020 to 2023 is worth noting (22.32 days in 2020 to 21.49 days in 2023). This suggests that the company may have faced challenges in streamlining its working capital processes during this period.

Overall, the trend in Boston Beer Company Inc's cash conversion cycle reflects efforts in enhancing operational efficiency and managing working capital effectively, which are critical aspects of sustaining a healthy financial position in the long run.