SpartanNash Co (SPTN)

SpartanNash Co's liquidity ratios indicate the company's ability to meet its short-term obligations.

The current ratio, which compares current assets to current liabilities, has remained fairly stable over the years, ranging from 1.46 to 1.63. This suggests that SpartanNash Co has an acceptable level of current assets to cover its current liabilities, with a value above 1 indicating the company's ability to meet its short-term obligations.

The quick ratio, also known as the acid-test ratio, measures the company's ability to meet short-term obligations using its most liquid assets. SpartanNash Co's quick ratio has fluctuated between 0.02 and 0.04, indicating that the company may have difficulty meeting its immediate obligations with its liquid assets alone. A quick ratio below 1 may signal that the company relies more on inventory and receivables to cover short-term liabilities.

The cash ratio, a more stringent measure of liquidity, focuses solely on cash and cash equivalents compared to current liabilities. SpartanNash Co's cash ratio has ranged between 0.02 and 0.04, suggesting that the company has a limited amount of cash available to cover its short-term obligations. A higher cash ratio is generally preferable as it indicates the company has more cash on hand relative to its current liabilities.

In summary, while SpartanNash Co's current ratio indicates a reasonable ability to meet short-term obligations, the lower quick and cash ratios imply that the company may rely more on non-cash assets to maintain liquidity. Monitoring these ratios over time can provide insights into the company's liquidity management strategies and financial health.

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Additional liquidity measure

The cash conversion cycle of SpartanNash Co has shown some fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was 24.96 days, indicating that it took approximately 25 days for the company to convert its investments in inventory and other resources into cash.

By December 31, 2021, the cash conversion cycle increased slightly to 25.33 days, implying a slight delay in the cash conversion process compared to the previous year.

The trend continued in December 31, 2022, with the cash conversion cycle lengthening to 25.59 days. This may suggest that SpartanNash Co faced challenges in efficiently managing its working capital during this period.

A significant increase was observed by December 31, 2023, with the cash conversion cycle extending to 33.13 days. This extended cash conversion cycle could signal potential issues in inventory management or collections efficiency, which may have impacted the company's liquidity position.

However, by December 31, 2024, the cash conversion cycle decreased to 24.81 days, returning close to the levels seen in 2020. This improvement may imply that SpartanNash Co implemented strategies to enhance its working capital management, resulting in a more efficient conversion of resources into cash.

Overall, the analysis of SpartanNash Co's cash conversion cycle over the past five years suggests fluctuations in the efficiency of the company's working capital management. It is important for the company to monitor and optimize its cash conversion cycle to ensure optimal liquidity and operational efficiency.