Sysco Corporation (SYY)

The analysis of Sysco Corporation's liquidity ratios over the specified periods reveals several critical trends and insights.

The Current Ratio, which measures the company's ability to meet short-term obligations with its total current assets, shows a declining trend from 1.47 in June 2021 to a low of 1.20 in June 2022, with a slight recovery to 1.24 in June 2023. Subsequently, it stabilizes around 1.20 in June 2024 and marginally increases to 1.21 in June 2025. Throughout this period, the ratio remains above 1.0, indicating that the company maintains enough current assets to cover its current liabilities, though the declining trend suggests a potential decrease in liquidity cushion over time.

The Quick Ratio, which excludes inventory from current assets to measure more immediate liquidity, demonstrates a more pronounced decline. It decreases from 0.93 in June 2021 to 0.66 in June 2022, then modestly increases to 0.68 in June 2023. Thereafter, it improves to 0.78 in June 2024 but drops again to 0.55 in June 2025. The quick ratio consistently remains below 1.0, indicating that immediate liquid assets are insufficient to cover current liabilities without relying on inventory. The fluctuations reflect ongoing challenges in maintaining high levels of liquid assets for immediate obligations.

The Cash Ratio, which considers only cash and cash equivalents relative to current liabilities, shows a significant decline over the period. It begins at 0.41 in June 2021, sharply decreases to 0.10 in June 2022, and remains near minimal levels at 0.09 in June 2023. The ratio then improves to 0.20 in June 2024 before dropping precipitously to 0.00 in June 2025, indicating that the company holds no or negligible cash equivalents relative to its current liabilities at that time. This trend suggests a diminishing availability of liquid cash reserves for immediate liabilities, which could compromise short-term liquidity positioning.

Overall, the liquidity ratios of Sysco Corporation exhibit a pattern of gradual decline, with the most notable contraction observed in the cash ratio. While the current and quick ratios remain above critical thresholds (particularly above 1.0 for the current ratio), their declining trajectories warrant caution, as they imply reduced liquidity buffers. The company’s decreasing cash holdings further accentuate potential liquidity risks and suggest reliance on other sources of short-term financing or asset conversion to meet obligations.

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See also:

Sysco Corporation Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle (CCC) of Sysco Corporation has demonstrated notable fluctuations over the specified period from June 30, 2021, to June 30, 2025.

Between June 30, 2021, and June 30, 2024, the CCC remained relatively stable, with values ranging narrowly from 16.62 days in 2021 to 15.59 days in 2024. Specifically, there was a slight increase from 16.62 days in 2021 to 17.40 days in 2022, indicating a marginal elongation of the cycle. Subsequently, the cycle shortened to 15.94 days in 2023 and further to 15.59 days in 2024, reflecting a modest improvement in liquidity efficiency and working capital management during this period.

However, a significant deviation occurs in the fiscal year ending June 30, 2025, where the CCC sharply increases to 52.46 days. This sudden elongation suggests a substantial deterioration in the company's ability to convert its investments in inventory and receivables into cash within a typical operating cycle, likely due to changes in operational efficiencies, supplier terms, or receivables collection policies.

In summary, the data illustrates a period of relative stability in Sysco's cash conversion cycle over three years, with a notable and abrupt increase in 2025, which may warrant further analysis of underlying operational or strategic factors influencing working capital.