JM Smucker Company (SJM)
Cash ratio
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 69,900 | 62,000 | 655,800 | 169,900 | 334,300 |
| Short-term investments | US$ in thousands | — | 0 | 487,800 | 0 | — |
| Total current liabilities | US$ in thousands | 2,652,000 | 3,761,100 | 1,986,700 | 1,952,800 | 2,867,500 |
| Cash ratio | 0.03 | 0.02 | 0.58 | 0.09 | 0.12 |
April 30, 2025 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($69,900K
+ $—K)
÷ $2,652,000K
= 0.03
The cash ratio of JM Smucker Company has exhibited significant fluctuations over the analyzed period from April 30, 2021, to April 30, 2025.
In April 2021, the cash ratio stood at 0.12, indicating that the company's cash and cash equivalents covered approximately 12% of its current liabilities, reflecting a relatively cautious liquidity position. By April 2022, the ratio declined to 0.09, signaling a slight decrease in liquidity cushion, which could suggest either an increase in current liabilities or a reduction in cash holdings.
A notable change occurred by April 2023, when the cash ratio surged sharply to 0.58. This substantial increase suggests a significant improvement in liquidity, with cash and cash equivalents increasingly covering more than half of the company's current liabilities. Such a strong position may be attributed to improved cash generation, strategic cash management, or a reduction in short-term liabilities.
However, the subsequent year demonstrated a sharp decline to 0.02 by April 2024, indicating a severe reduction in liquidity. The cash ratio approaching near-zero levels suggests a substantial depletion of cash reserves relative to current liabilities, potentially increasing liquidity risk and implying possible reinvestment into operations, debt repayment, or other strategic uses.
By April 2025, the ratio experienced a slight uptick to 0.03, yet it remained at a very low level. This minimal increase points to ongoing liquidity constraints or a continued emphasis on deploying cash elsewhere, while still maintaining limited cash coverage of current liabilities.
Overall, the cash ratio trend reveals periods of both strengthening and weakening liquidity positions, with a peak in 2023 followed by significant declines in subsequent years. This pattern underscores the importance of monitoring the company's liquidity management strategies, short-term financing needs, and cash flow health to understand its ability to meet short-term obligations.