Tootsie Roll Industries Inc (TR)

Tootsie Roll Industries Inc's liquidity ratios have fluctuated over the years based on the provided data. The current ratio, which measures the company's ability to cover short-term liabilities with short-term assets, decreased from 4.58 in 2020 to 0.76 in 2024. This indicates a significant decline in the company's short-term liquidity position, as the current assets are no longer sufficient to cover the short-term obligations.

Similarly, the quick ratio, also known as the acid-test ratio, shows a decreasing trend from 2.98 in 2020 to 2.23 in 2024. This ratio excludes inventory from current assets, providing a more conservative measure of liquidity. Although the quick ratio remains above 1 in all years, indicating that the company can cover its current liabilities without relying on inventory, the declining trend raises concerns about the efficiency of its short-term asset management.

The cash ratio, which represents the proportion of cash and cash equivalents to current liabilities, shows a similar trend as the quick ratio, decreasing from 2.98 in 2020 to 2.23 in 2024. This indicates that Tootsie Roll Industries Inc has a decreasing ability to pay off its current obligations solely with cash and cash equivalents.

Overall, the decreasing trends in the current ratio, quick ratio, and cash ratio suggest a potential deterioration in Tootsie Roll Industries Inc's liquidity position over the years. It is important for the company to closely monitor and effectively manage its short-term assets and liabilities to ensure financial stability and meet its short-term obligations in the future.

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Additional liquidity measure

Tootsie Roll Industries Inc's cash conversion cycle has fluctuated over the years, indicating changes in its efficiency in managing cash flows.

In December 2020, the cash conversion cycle was 72.32 days, reflecting a relatively lengthy period for Tootsie Roll to convert its investments in inventory into cash receipts.

By the end of December 2021, there was a notable improvement in the cash conversion cycle, which decreased to 54.53 days. This suggests that Tootsie Roll was able to manage its working capital more effectively and convert inventory into cash at a faster rate.

However, in December 2022, the cash conversion cycle increased to 67.71 days, indicating a potential slowdown in the company's cash conversion efficiency. This could be attributed to factors such as changes in inventory management or delays in collecting receivables.

The cash conversion cycle remained relatively stable in December 2023 at 67.60 days, showing that Tootsie Roll maintained its efficiency in managing cash flows despite the slight increase from the previous year.

Notably, in December 2024, the cash conversion cycle was reported as 0.00 days. This figure seems unusual and may require further investigation to determine if it is an accurate representation of Tootsie Roll's cash conversion efficiency or if there were any data reporting errors.

Overall, fluctuations in Tootsie Roll Industries Inc's cash conversion cycle suggest varying levels of efficiency in managing working capital and converting inventory and receivables into cash. It is important for the company to consistently monitor and improve its cash conversion cycle to optimize its financial performance and liquidity.