JM Smucker Company (SJM)
Quick ratio
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 69,900 | 62,000 | 655,800 | 169,900 | 334,300 |
| Short-term investments | US$ in thousands | — | 0 | 487,800 | 0 | — |
| Receivables | US$ in thousands | 619,000 | 736,500 | 597,600 | 524,700 | 533,700 |
| Total current liabilities | US$ in thousands | 2,652,000 | 3,761,100 | 1,986,700 | 1,952,800 | 2,867,500 |
| Quick ratio | 0.26 | 0.21 | 0.88 | 0.36 | 0.30 |
April 30, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($69,900K
+ $—K
+ $619,000K)
÷ $2,652,000K
= 0.26
The quick ratio of JM Smucker Company has exhibited notable fluctuations over the analyzed period from April 30, 2021, to April 30, 2025. As of April 30, 2021, the quick ratio was 0.30, indicating that the company's liquid assets covered less than a third of its current liabilities, which could suggest a relatively conservative liquidity position at that time.
By April 30, 2022, the quick ratio had increased to 0.36, representing a modest improvement in liquidity, but still below a comfortable threshold of 1.0. This suggests some enhancement in short-term liquidity but continues to imply potential challenges in meeting immediate liabilities without relying on inventory or other less liquid assets.
A significant shift is observed by April 30, 2023, when the quick ratio surged to 0.88. This substantial increase indicates a marked improvement in the company's liquidity position, approaching near sufficient coverage of current liabilities through quick assets. Such a transition may reflect better management of liquid assets or a reduction in current liabilities, or a combination of both factors.
However, the ratio declines sharply again by April 30, 2024, to 0.21, signaling a deterioration in liquidity. This decline could imply a reduction in quick assets, an increase in current liabilities, or both, raising concerns about the company's ability to meet short-term obligations promptly.
Finally, by April 30, 2025, the quick ratio slightly recovers to 0.26, yet remains substantially below the 1.0 threshold, indicating continued conservatism or potential liquidity constraints. While improvements from the previous year are observed, the ratio remains low, highlighting the company's ongoing reliance on less liquid assets or potentially limited immediate liquidity cushion.
Overall, the trend demonstrates periods of improving liquidity that are subsequently offset by declines, illustrating responsiveness to operational or financial changes within the company's liquidity management. Despite the improvements observed in 2023, the company’s quick ratio remains below the generally acceptable benchmark of 1.0, suggesting that liquidity management may be a point of focus for sustaining financial flexibility.