JM Smucker Company (SJM)
Cash ratio
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 62,000 | 655,800 | 169,900 | 334,300 | 391,100 |
| Short-term investments | US$ in thousands | — | 487,800 | — | — | — |
| Total current liabilities | US$ in thousands | 3,761,100 | 1,986,700 | 1,952,800 | 2,867,500 | 1,587,100 |
| Cash ratio | 0.02 | 0.58 | 0.09 | 0.12 | 0.25 |
April 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($62,000K
+ $—K)
÷ $3,761,100K
= 0.02
The cash ratio of JM Smucker Company has shown significant fluctuations over the past five years. In April 2023, the company had a relatively high cash ratio of 0.58, indicating that it had a substantial amount of cash and cash equivalents to cover its current liabilities. However, in the following years, the ratio declined sharply to 0.09 in April 2022, 0.12 in April 2021, and further dropped to 0.02 in April 2024.
This downward trend in the cash ratio suggests that JM Smucker Company may be holding less cash relative to its current liabilities in recent years. A lower cash ratio may indicate potential liquidity challenges, as the company may have less immediate cash available to meet its short-term obligations. It could also imply a shift in the company's cash management strategy, such as increased investment in other assets or potential cash outflows for acquisitions or expansions.
It is essential for investors and stakeholders to monitor JM Smucker Company's cash ratio closely to assess its liquidity position and financial stability. Further analysis of the company's cash management practices and overall financial health may provide deeper insights into the reasons behind the fluctuations in the cash ratio.