Tyson Foods Inc (TSN)
Cash ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 573,000 | 1,031,000 | 2,507,000 | 1,420,000 | 484,000 |
| Short-term investments | US$ in thousands | 15,000 | -35,000 | -72,000 | — | -42,000 |
| Total current liabilities | US$ in thousands | 6,499,000 | 5,313,000 | 6,325,000 | 4,234,000 | 5,513,000 |
| Cash ratio | 0.09 | 0.19 | 0.38 | 0.34 | 0.08 |
September 30, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($573,000K
+ $15,000K)
÷ $6,499,000K
= 0.09
The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. It is calculated by dividing the company's cash and cash equivalents by its current liabilities.
Tyson Foods, Inc.'s cash ratio has shown a declining trend over the past five years, dropping from 0.16 in 2019 to 0.14 in 2023. This indicates that the company's ability to cover its short-term liabilities with its cash and cash equivalents has weakened.
A cash ratio of 0.14 in 2023 means that for every dollar of current liabilities, Tyson Foods, Inc. only has $0.14 of cash and cash equivalents available. This suggests a potential liquidity challenge in meeting its short-term obligations solely with available cash.
The significant decrease in the cash ratio from 2021 to 2022 (0.48 to 0.29) is notable and may indicate a change in the company's cash management or financial position during that period.
In conclusion, Tyson Foods, Inc.'s declining cash ratio signals a potential liquidity risk, and it is important for the company to closely monitor and manage its cash and cash equivalents to ensure it can meet its short-term obligations effectively in the future.
Peer comparison
Sep 30, 2023