Treehouse Foods Inc (THS)

Liquidity ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 1.50 1.16 1.26 1.07 1.01 1.74 1.15 1.18 1.89 1.21 1.20 1.21 1.44 1.69 1.48 1.58 1.50 1.49 1.71 1.64
Quick ratio 0.70 0.26 0.26 0.22 0.24 0.18 0.36 0.42 0.40 0.35 0.31 0.31 0.68 0.69 0.59 0.70 0.58 0.41 0.44 0.53
Cash ratio 0.45 0.03 0.02 0.02 0.05 0.06 0.17 0.18 0.27 0.07 0.02 0.05 0.37 0.40 0.31 0.37 0.25 0.05 0.08 0.09

Treehouse Foods Inc's liquidity ratios provide insights into the company's ability to meet its short-term financial obligations. The current ratio indicates a positive trend, as it has increased from 0.98 in Q4 2022 to 1.50 in Q4 2023. This signifies that the company's current assets are sufficient to cover its current liabilities, with an improving ability over time.

On the other hand, the quick ratio and cash ratio demonstrate a different picture. The quick ratio, also known as the acid-test ratio, shows a concerning trend as it has fluctuated over the quarters, ranging from 0.23 in Q3 2022 to 0.74 in Q4 2023. This suggests that the company's liquidity position may be more volatile when considering only the most liquid assets.

Similarly, the cash ratio, which measures the company's ability to cover current liabilities with cash and cash equivalents, also displays fluctuations. The cash ratio has varied between 0.06 in Q2 and Q1 2023 to 0.49 in Q4 2023, indicating a potential inconsistency in holding enough cash on hand to meet short-term obligations.

Overall, while the current ratio reflects an improving liquidity position for Treehouse Foods Inc, the quick ratio and cash ratio highlight fluctuations and potential challenges in maintaining sufficient liquid assets to cover immediate liabilities consistently. It is essential for the company to continue monitoring and managing its liquidity effectively to ensure financial stability and solvency.

Additional liquidity measure

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 18.14 25.05 33.46 19.73 8.56 7.89 16.98 16.66 -3.99 154.01 138.55 125.69 30.33 91.73 87.53 80.71 26.75 42.02 54.66 49.24

The cash conversion cycle of Treehouse Foods Inc has shown some fluctuations over the past eight quarters. In the most recent quarter, Q4 2023, the company's cash conversion cycle was 18.56 days, indicating a relatively efficient management of cash resources in the conversion of inventory into cash from sales. This is a significant improvement compared to the previous quarter, Q3 2023, where the cash conversion cycle was higher at 32.99 days.

Looking further back, the company experienced a longer cash conversion cycle in Q2 2023 at 43.53 days, suggesting possible challenges in managing working capital efficiency during that period. However, this was notably lower than the peak observed in Q2 2022, when the cash conversion cycle reached 59.62 days.

Comparing year-over-year performance, the company has generally shown improvements in managing its cash conversion cycle, with Q4 2023 demonstrating a shorter cycle compared to the same quarter in the prior year, Q4 2022. It is also worth noting that the cash conversion cycle was at its lowest point in Q3 2022 at 5.84 days, indicating exceptional efficiency in working capital management at that time.

Overall, Treehouse Foods Inc appears to have made progress in optimizing its cash conversion cycle over the analyzed quarters, with some fluctuations but a general trend towards improved efficiency in managing cash flow from operations.