Constellation Brands Inc Class A (STZ)
Liquidity ratios
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.19 | 1.18 | 1.23 | 2.40 | 1.51 |
| Quick ratio | 0.31 | 0.32 | 0.41 | 0.98 | 1.75 |
| Cash ratio | 0.05 | 0.01 | 0.07 | 0.36 | 1.37 |
Constellation Brands Inc Class A's liquidity ratios show some fluctuation over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been relatively stable, ranging from 1.18 to 2.40. A current ratio above 1 indicates that the company has more current assets than current liabilities.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Constellation Brands Inc Class A's quick ratio has shown a downward trend over the years, dropping from 1.75 in 2020 to 0.31 in 2024. A quick ratio below 1 suggests that the company may have difficulty meeting its short-term obligations without relying on selling inventory.
Lastly, the cash ratio, which indicates the proportion of a company's current assets held in cash or cash equivalents, has varied significantly for Constellation Brands Inc Class A. The cash ratio decreased from 1.37 in 2020 to 0.05 in 2024. A lower cash ratio may signal potential liquidity issues, as the company has less cash on hand to cover its current liabilities.
Overall, Constellation Brands Inc Class A's liquidity ratios suggest that while the company has sufficient current assets to cover its short-term obligations, there has been a decline in its quick and cash ratios, indicating a potential need to closely monitor its liquidity position.
See also:
Additional liquidity measure
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 65.81 | 62.29 | 59.98 | 68.01 | 69.26 |
The cash conversion cycle of Constellation Brands Inc Class A has shown a slight fluctuation over the past five years. In the most recent fiscal year, ending February 29, 2024, the cash conversion cycle increased to 65.81 days compared to 62.29 days in the previous year. This may indicate a potential inefficiency in the company's management of cash flow, as it took longer to convert its investments in inventory and receivables into cash in the latest period.
Looking back over the five-year period, the trend shows some variability in the cash conversion cycle. The cycle was lowest in the fiscal year ending February 28, 2022, at 59.98 days, and highest in the fiscal year ending February 29, 2020, at 69.26 days. This fluctuation suggests that Constellation Brands Inc Class A has experienced some challenges in managing its working capital efficiency consistently.
Overall, while the cash conversion cycle of Constellation Brands Inc Class A has varied slightly over the years, it is important for the company to focus on optimizing its inventory management and accounts receivable collection processes to shorten the cycle and improve its cash flow efficiency.