JM Smucker Company (SJM)
Quick ratio
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 62,000 | 655,800 | 169,900 | 334,300 | 391,100 |
| Short-term investments | US$ in thousands | — | 487,800 | — | — | — |
| Receivables | US$ in thousands | 736,500 | 597,600 | 524,700 | 533,700 | 551,400 |
| Total current liabilities | US$ in thousands | 3,761,100 | 1,986,700 | 1,952,800 | 2,867,500 | 1,587,100 |
| Quick ratio | 0.21 | 0.88 | 0.36 | 0.30 | 0.59 |
April 30, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($62,000K
+ $—K
+ $736,500K)
÷ $3,761,100K
= 0.21
The quick ratio of JM Smucker Company has demonstrated significant fluctuations over the past five years. The quick ratio, which measures the company's ability to cover its current liabilities with its most liquid assets, was lowest in April 2024 at 0.21, indicating a weaker liquidity position compared to the previous years. This significant decrease from the previous year suggests potential challenges in meeting short-term obligations using quick assets only.
In contrast, the quick ratio was at its highest in April 2023 at 0.88, reflecting a strong liquidity position relative to that year. The company had a sufficient amount of quick assets to cover its current liabilities in April 2023. However, there was a subsequent decline in the quick ratio in April 2022 to 0.36, signaling a decreased ability to fulfill short-term obligations using liquid assets.
The quick ratio further declined in April 2021 to 0.30, indicating a continued decrease in liquidity relative to the previous year. This could be a cause for concern as the company may face challenges in meeting its short-term liabilities with its quick assets alone. The quick ratio showed some improvement in April 2020 at 0.59, although it was still lower than in April 2023.
Overall, the fluctuations in JM Smucker Company's quick ratio over the five-year period suggest varying levels of liquidity risk and the need for close monitoring of the company's ability to meet its short-term obligations using liquid assets.