Sysco Corporation (SYY)
Cash ratio
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 696,000 | 745,000 | 867,086 | 3,007,120 | 6,059,430 |
| Short-term investments | US$ in thousands | 24,000 | 12,767 | 5,983 | — | 1,388 |
| Total current liabilities | US$ in thousands | 9,241,000 | 8,540,000 | 8,750,050 | 7,319,840 | 6,717,850 |
| Cash ratio | 0.08 | 0.09 | 0.10 | 0.41 | 0.90 |
June 30, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($696,000K
+ $24,000K)
÷ $9,241,000K
= 0.08
The cash ratio measures a company's ability to cover its short-term obligations with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term liabilities without relying on external sources of funding.
Looking at the trend in Sysco Corporation's cash ratio over the past five years, we observe a notable decline from 0.90 in 2020 to 0.08 in 2024. This indicates a significant reduction in the company's ability to cover its short-term liabilities with cash alone.
The sharp decrease in the cash ratio could raise concerns about Sysco's liquidity position and its ability to meet its short-term obligations without relying on other liquid assets or external financing. It suggests that the company may be holding lower levels of cash relative to its current liabilities in recent years.
Further analysis into the reasons behind this decline in the cash ratio, such as increased operational expenses, changes in working capital management, or investment in long-term assets, would be necessary to assess the overall financial health and liquidity risk of Sysco Corporation.
Peer comparison
Jun 30, 2024