Sysco Corporation (SYY)

The liquidity ratios of Sysco Corporation from September 2020 through June 2025 reveal notable trends and variations across different measures of liquidity.

Current Ratio: This ratio, indicating the company's ability to meet short-term obligations with its current assets, initially increased from 1.73 as of September 30, 2020, to a peak of approximately 1.79 by the end of 2020. Subsequently, it experienced a gradual decline, reaching a low of about 1.20 in March 2022. After this trough, the ratio generally trended upward, ending at 1.21 by March 2025, with intermittent fluctuations. Overall, the current ratio remained above 1.20 throughout the period, suggesting that the company maintained sufficient current assets relative to current liabilities, albeit with a decreasing trend during 2021 and early 2022.

Quick Ratio: The quick ratio, which excludes inventory from current assets to assess more immediate liquidity, reflected a decline from approximately 1.27–1.29 at the end of 2020 to around 0.66–0.70 in mid-2022. The ratio continued to fluctuate within the 0.64–0.76 range, ending at approximately 0.66 in June 2025. The persistent below 1.0 levels indicate that a significant portion of current assets consists of inventory and less liquid assets, which may limit immediate liquidity under sudden cash demands.

Cash Ratio: This ratio, measuring the company's most liquid assets (cash and cash equivalents) against current liabilities, showed a marked decline from around 0.84–0.86 at the end of 2020 to a minimum of approximately 0.05 in late 2022. Since then, it generally increased, reaching about 0.16 by March 2025. Throughout the period, the cash ratio remained below 0.2, indicating limited cash reserves relative to current liabilities and emphasizing reliance on other liquid assets for short-term obligations.

In summary, while Sysco Corporation's current ratio has remained above the generally acceptable threshold of 1.0, suggesting overall adequate short-term liquidity, the declining trend during 2021 and early 2022 indicates increased pressure on liquidity margins. The quick and cash ratios, both below 1.0, highlight that the company’s immediate liquidity position is more constrained, primarily depending on inventories and less liquid assets to cover short-term liabilities. The partial recovery of the cash ratio in later periods suggests some improvement in liquid cash holdings, yet liquidity remains moderate, emphasizing the importance of inventory management and efficient working capital practices in maintaining operational flexibility.

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See also:

Sysco Corporation Liquidity Ratios (Quarterly Data)

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Additional liquidity measure

The cash conversion cycle (CCC) of Sysco Corporation over the period from September 2020 to June 2025 exhibits notable fluctuations, reflecting evolving operational efficiencies and working capital management. Initially, the CCC stood at approximately 14.86 days at the end of September 2020, indicating relatively swift conversion of investments in inventory and receivables into cash.

Throughout 2020 and into early 2021, the cycle experienced an upward trend, reaching a peak of 19.35 days at the end of 2021. This increase suggests that the company faced elongation in either its days sales outstanding (DSO), days inventory outstanding (DIO), or days payable outstanding (DPO), leading to a longer duration to convert investments into cash.

In 2022, the CCC remained elevated, fluctuating around 17.88 to 19.87 days, implying persistent challenges in managing working capital efficiently. Notably, the cycle decreased slightly to 15.94 days by September 2022, possibly indicating some operational improvements or changes in credit and inventory policies.

The subsequent period saw a minor rebound to nearly 19.09 days by December 2022, followed by a slight decline to 17.68 days in March 2023. The first half of 2024 demonstrates a trend toward stabilization, with the cycle declining to around 15.60 days in June 2024, which suggests improved cash collection or inventory management.

However, the cycle increased again to 18.80 days by September 2024 and slightly rose further to 19.60 days at the end of 2024. In the most recent data, the CCC decreased to 17.65 days in March 2025 and further to 16.66 days in June 2025, indicating a renewed improvement in operational efficiency.

Overall, Sysco’s cash conversion cycle has shown periods of elongation and contraction, reflecting dynamic management of receivables, inventory, and payables in response to market conditions, operational strategies, and broader economic factors. The recent downward trend in the CCC suggests an ongoing effort to optimize working capital and enhance liquidity.