Treehouse Foods Inc (THS)

Liquidity ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Current ratio	1.36	1.40	1.44	1.52	1.50	1.16	1.26	1.07	0.98	1.74	1.15	1.18	1.17	1.21	1.20	1.21	1.44	1.69	1.48	1.58
Quick ratio	0.39	0.14	0.18	0.33	0.45	0.03	0.02	0.02	0.08	0.08	0.17	0.18	0.29	0.07	0.02	0.05	0.37	0.40	0.31	0.37
Cash ratio	0.39	0.14	0.18	0.33	0.45	0.03	0.02	0.02	0.08	0.08	0.17	0.18	0.29	0.07	0.02	0.05	0.37	0.40	0.31	0.37

Treehouse Foods Inc's current ratio has shown fluctuations over the past years, ranging from 0.98 to 1.74. The current ratio measures the company's ability to cover its short-term obligations with its current assets. While the ratio was below 1 in December 31, 2022, indicating potential liquidity issues, it improved to 1.52 by March 31, 2024, indicating a stronger ability to meet short-term obligations.

The quick ratio, which excludes inventory from current assets, portrays a more conservative view of liquidity. Treehouse Foods Inc's quick ratio ranged from 0.02 to 0.45 over the same period. The wide fluctuations in the quick ratio may suggest inventory management challenges, as the ratio was as low as 0.02 in various quarters, indicating potential difficulties in meeting immediate liabilities without relying on inventory.

Lastly, the cash ratio, which focuses solely on cash and cash equivalents to cover current liabilities, has shown similar trends to the quick ratio, ranging from 0.02 to 0.45. This indicates that Treehouse Foods Inc may have limited cash reserves in relation to its short-term liabilities, with fluctuations reflecting variations in the company's cash position over time.

In conclusion, while Treehouse Foods Inc's current ratio generally indicates a satisfactory level of liquidity, the lower quick ratio and cash ratio figures suggest potential challenges in quickly meeting short-term obligations without relying on inventory or cash reserves. Monitoring and improving these ratios can enhance the company's overall liquidity position.

Additional liquidity measure

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cash conversion cycle	days	70.16	79.45	75.77	69.12	68.26	77.42	85.02	78.50	74.36	77.20	104.14	86.44	74.21	80.11	74.00	67.45	61.59	69.01	65.15	55.90

The cash conversion cycle of Treehouse Foods Inc has shown some fluctuations over the past few years. Starting at 55.90 days on March 31, 2020, the cycle increased to its peak of 104.14 days on June 30, 2022, before gradually decreasing to 70.16 days by December 31, 2024. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash flows from sales, then back into cash through collections from customers.

A longer cash conversion cycle indicates that Treehouse Foods Inc takes more time to sell its inventory and collect cash from customers, potentially tying up more capital in the operating cycle. Conversely, a shorter cycle implies quicker turnover of inventory and receivables, which can improve liquidity and working capital management. It is essential for Treehouse Foods Inc to monitor and manage its cash conversion cycle effectively to optimize cash flow, working capital, and overall financial performance.