JM Smucker Company (SJM)
Liquidity ratios
| Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.52 | 0.78 | 3.20 | 1.28 | 1.44 | 1.16 | 1.09 | 1.05 | 1.03 | 1.19 | 1.06 | 0.71 | 0.68 | 0.82 | 0.77 | 0.96 | 1.24 | 0.77 | 0.72 | 0.70 |
| Quick ratio | 0.21 | 0.33 | 0.56 | 0.66 | 0.88 | 0.37 | 0.31 | 0.35 | 0.36 | 0.51 | 0.43 | 0.27 | 0.30 | 0.44 | 0.36 | 0.43 | 0.59 | 0.27 | 0.25 | 0.23 |
| Cash ratio | 0.02 | 0.01 | 0.24 | 0.36 | 0.58 | 0.06 | 0.01 | 0.07 | 0.09 | 0.17 | 0.08 | 0.06 | 0.12 | 0.20 | 0.15 | 0.19 | 0.25 | 0.04 | 0.02 | 0.02 |
The liquidity ratios of JM Smucker Company indicate its ability to meet its short-term obligations and manage its current liabilities.
The current ratio has shown some fluctuation over the periods analyzed, ranging from a low of 0.52 to a high of 3.20. A current ratio below 1 suggests that the company may have difficulty meeting its short-term obligations with its current assets alone. The company experienced lower current ratios in the earlier periods, improving to above 1 in more recent periods which is a positive trend.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also displayed variability over time. The quick ratio ranged from a low of 0.21 to a high of 0.88. A quick ratio below 1 indicates that the company may struggle to meet its short-term obligations without relying on the sale of inventory.
The cash ratio, which is the most conservative liquidity measure as it includes only cash and cash equivalents, showed fluctuations as well. The cash ratio ranged from 0.01 to 0.58, indicating the company's ability to cover its current liabilities with cash on hand.
Overall, JM Smucker Company's liquidity ratios suggest that it has made improvements in its ability to meet short-term obligations, particularly in more recent periods. However, consistent monitoring of liquidity is essential to ensure the company maintains a healthy financial position.
Additional liquidity measure
| Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 17.01 | 21.12 | 17.33 | 14.99 | 6.72 | 23.85 | 32.02 | 30.96 | 18.36 | 27.71 | 33.86 | 29.42 | 20.01 | 26.88 | 33.47 | 34.45 | 32.26 | 44.35 | 52.23 | 50.57 |
The cash conversion cycle for JM Smucker Company has shown fluctuations over the past 20 periods, ranging from a low of 6.72 days to a high of 52.23 days. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is efficiently managing its working capital.
Analyzing the trends in the cash conversion cycle for JM Smucker Company, we can see that there are periods of both improvement and deterioration. For example, in the most recent period ending April 30, 2024, the cash conversion cycle decreased to 17.01 days from the previous period, indicating an improvement in converting resources into cash. This suggests that the company may have streamlined its operations or improved its inventory management.
On the other hand, there are periods where the cash conversion cycle increased significantly, such as in the quarter ending July 31, 2019, where the cycle peaked at 52.23 days. This could indicate challenges in managing working capital efficiently, potentially due to issues like slow inventory turnover or longer collection periods for receivables.
Overall, JM Smucker Company should aim to consistently monitor and optimize its cash conversion cycle to ensure it is operating efficiently and effectively utilizing its resources to generate cash flows.