Sysco Corporation (SYY)

The liquidity ratios of Sysco Corporation have shown a declining trend over the past five years.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, decreased from 1.84 in 2020 to 1.20 in 2024. A current ratio above 1 indicates that the company has more current assets than current liabilities. While a current ratio of 1.20 in 2024 is still above 1, it suggests a slight decrease in the company's liquidity and ability to meet its short-term obligations.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. The downward trend is evident in this ratio as well, declining from 1.35 in 2020 to 0.66 in 2024. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term obligations without relying on selling inventory.

The cash ratio, which is the most conservative liquidity ratio, also shows a significant decline over the years, from 0.90 in 2020 to 0.08 in 2024. The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents alone. A decreasing trend in the cash ratio may indicate potential challenges in meeting immediate cash obligations without selling other assets or obtaining external financing.

In conclusion, Sysco Corporation's liquidity ratios have been deteriorating over the past five years, indicating potential concerns regarding the company's ability to meet its short-term financial commitments solely based on its existing liquid assets. It is important for stakeholders to monitor these liquidity ratios closely to assess the company's liquidity position accurately.

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See also:

Sysco Corporation Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of Sysco Corporation has shown some fluctuation over the past five years. In the most recent fiscal year ending on June 30, 2024, the company's cash conversion cycle was 15.59 days, which is slightly higher than the previous year's figure of 15.34 days. This indicates that Sysco is taking slightly longer to convert its resources into cash in the most recent period.

Looking back over the last five years, there has been some variation in the cash conversion cycle for Sysco. The cycle was lowest at 15.34 days in 2023 and highest at 17.72 days in 2020. Despite these fluctuations, it is important to note that the company has generally maintained a relatively efficient cash conversion cycle, reflecting its ability to manage its working capital effectively.

Overall, Sysco's performance in terms of its cash conversion cycle demonstrates a reasonable level of efficiency in converting its inventory into cash. The company's management of accounts receivable and accounts payable appears to be effective in balancing the timing of cash inflows and outflows, contributing to the overall stability of its cash conversion cycle over the years.