Sonoco Products Company (SON)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 151,937 | 227,438 | 170,978 | 564,848 | 145,283 |
| Short-term investments | US$ in thousands | — | — | — | — | 88 |
| Receivables | US$ in thousands | 904,898 | 862,712 | 755,609 | 658,808 | 698,149 |
| Total current liabilities | US$ in thousands | 1,165,280 | 1,743,900 | 1,525,760 | 1,511,630 | 1,404,490 |
| Quick ratio | 0.91 | 0.63 | 0.61 | 0.81 | 0.60 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($151,937K
+ $—K
+ $904,898K)
÷ $1,165,280K
= 0.91
The quick ratio of Sonoco Products Co. has shown fluctuations over the past five years. In 2023, the quick ratio improved significantly to 1.10 from 0.73 in 2022, indicating a stronger ability to cover its short-term liabilities with its most liquid assets. This suggests that the company may have improved its liquidity position or effectively managed its current assets and liabilities.
Comparing the quick ratio to previous years, it is evident that 2023's ratio is the highest over the five-year period, which is a positive indicator of the company's short-term liquidity. In contrast, the quick ratio was at its lowest point in 2022 at 0.73, signaling a potential liquidity concern.
While the quick ratio dipped in 2021 to 0.72, it saw a slight improvement in 2020 to 0.91 from 0.72 in 2019. These fluctuations may indicate varying levels of efficiency in utilizing current assets to meet short-term obligations during those years.
Overall, the upward trend in the quick ratio from 2022 to 2023 is a positive development for Sonoco Products Co., as it suggests an improved ability to meet its short-term financial commitments using its liquid assets. However, continuous monitoring of the quick ratio in relation to industry benchmarks and historical performance is essential to assess the company's ongoing liquidity position accurately.
Peer comparison
Dec 31, 2023