Sonoco Products Company (SON)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 2,050,360 | 2,361,250 | 1,658,680 | 1,830,550 | 1,521,200 |
| Total current liabilities | US$ in thousands | 1,165,280 | 1,743,900 | 1,525,760 | 1,511,630 | 1,404,490 |
| Current ratio | 1.76 | 1.35 | 1.09 | 1.21 | 1.08 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $2,050,360K ÷ $1,165,280K
= 1.76
The current ratio of Sonoco Products Co. has shown variability over the past five years, ranging from a low of 1.08 in 2019 to a high of 1.76 in 2023. The current ratio indicates the company's ability to meet its short-term financial obligations using its current assets.
A current ratio above 1 generally suggests that a company has more current assets than current liabilities, which is a positive sign of liquidity. In this case, Sonoco's current ratio has generally been at levels above 1, indicating that the company has been able to cover its short-term obligations comfortably.
The significant increase in the current ratio from 1.08 in 2019 to 1.76 in 2023 implies that Sonoco has improved its liquidity position over the years. This trend indicates that the company may have strengthened its working capital management or increased its current assets relative to its current liabilities.
However, it is essential to note that a very high current ratio may also indicate that a company is not efficiently managing its current assets or may have too much cash tied up in unproductive assets. Therefore, while a current ratio above 1 is generally positive, it is important to consider other financial ratios and factors when assessing a company's overall financial health.
Peer comparison
Dec 31, 2023