Sprouts Farmers Market LLC (SFM)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.10 | 1.15 | 1.18 | 1.27 | 1.29 | 1.28 | 1.25 | 1.22 | 1.11 | 1.16 | 1.14 | 1.18 | 0.94 | 0.86 | 1.07 | 0.97 | 0.93 | 0.87 | 0.85 | 0.88 |
| Quick ratio | 0.42 | 0.49 | 0.51 | 0.60 | 0.59 | 0.62 | 0.59 | 0.65 | 0.52 | 0.55 | 0.48 | 0.55 | 0.37 | 0.32 | 0.60 | 0.47 | 0.24 | 0.20 | 0.16 | 0.12 |
| Cash ratio | 0.37 | 0.46 | 0.48 | 0.57 | 0.56 | 0.60 | 0.56 | 0.62 | 0.48 | 0.51 | 0.46 | 0.52 | 0.34 | 0.27 | 0.57 | 0.45 | 0.20 | 0.17 | 0.13 | 0.05 |
Sprouts Farmers Market Inc's liquidity ratios paint a picture of the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown a declining trend over the past eight quarters, from 1.29 in Q4 2022 to 1.10 in Q4 2023. While a current ratio above 1 indicates the company has sufficient current assets to cover its current liabilities, a decreasing trend suggests potential liquidity challenges.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Similarly, the quick ratio has been on a downward trend, from 0.69 in Q4 2022 to 0.51 in Q4 2023, indicating a potential weakening ability to meet short-term obligations without relying on inventory.
The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with its cash and cash equivalents. The cash ratio has shown fluctuations but generally a downward trend, from 0.69 in Q4 2022 to 0.41 in Q4 2023. This trend suggests that Sprouts Farmers Market Inc may have limited cash reserves to cover its short-term liabilities.
Overall, based on the deteriorating current, quick, and cash ratios over the past eight quarters, Sprouts Farmers Market Inc's liquidity position may be weakening, indicating potential challenges in meeting its short-term financial obligations. It is essential for the company to monitor and manage its liquidity effectively to ensure financial stability.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 10.44 | 9.26 | 10.46 | 8.45 | 9.23 | 8.90 | 8.15 | 7.48 | 8.86 | 7.36 | 7.74 | 7.52 | 7.74 | 7.25 | 6.34 | 4.19 | 11.40 | 5.16 | 14.23 | 14.68 |
Sprouts Farmers Market Inc's cash conversion cycle provides insight into the efficiency of its cash management and operating cycle. The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash flow from sales.
Analyzing the data provided, we observe fluctuations in the cash conversion cycle over the past eight quarters:
- In Q4 2023, the cash conversion cycle was 14.99 days, indicating that it took approximately 15 days for Sprouts Farmers Market Inc to convert its investments in inventory and other resources into cash flow.
- This figure decreased to 12.37 days in Q3 2023, suggesting improved efficiency in converting assets into cash compared to the previous quarter.
- In Q2 2023, the cash conversion cycle increased to 14.04 days, signaling a slower conversion of assets into cash flow compared to the previous quarter.
- Q1 2023 saw a further improvement with a cash conversion cycle of 11.27 days, indicating enhanced efficiency in cash management and operating cycle.
Overall, we note a general fluctuation in the cash conversion cycle over the past eight quarters. It is important for Sprouts Farmers Market Inc to closely monitor and manage its cash conversion cycle to ensure optimal efficiency in converting assets into cash flow. Further analysis and comparison with industry benchmarks could provide additional insights into the company's financial performance and operational efficiency.