US Foods Holding Corp (USFD)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 269,000 | 211,000 | 148,000 | 828,000 | 90,000 |
| Short-term investments | US$ in thousands | 1,000 | — | — | — | — |
| Total current liabilities | US$ in thousands | 3,112,000 | 2,796,000 | 2,550,000 | 1,982,000 | 2,362,000 |
| Cash ratio | 0.09 | 0.08 | 0.06 | 0.42 | 0.04 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($269,000K
+ $1,000K)
÷ $3,112,000K
= 0.09
The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet its short-term financial obligations.
Looking at the trend of US Foods Holding Corp's cash ratio over the past five years, we observe fluctuations. In 2023, the cash ratio was 0.09, slightly higher than the previous year's 0.08. This indicates that the company had $0.09 in cash and cash equivalents for every $1 of current liabilities, showing a slight improvement in liquidity position compared to the prior year.
However, it is important to note that the cash ratio for 2023 is still lower than the levels seen in 2020 and 2021, where the company had significantly higher cash ratios of 0.42 and 0.06, respectively. This suggests that US Foods Holding Corp had a stronger ability to cover its short-term obligations in those years compared to 2023.
The sharp decrease in the cash ratio from 2020 to 2021 raises concerns about the management of cash and liquidity during that period. The subsequent improvement in 2023 indicates some progress in rebuilding liquidity reserves, although the company still has room for enhancement in this area.
Overall, the cash ratio of US Foods Holding Corp has shown variability over the past five years, reflecting fluctuations in the company's cash position relative to its short-term liabilities. Further analysis of the company's cash management strategies and future cash flow projections would provide more insights into its ability to meet its financial obligations effectively.
Peer comparison
Dec 31, 2023