US Foods Holding Corp (USFD)

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 1.30 1.29 1.34 1.34 1.37 1.36 1.37 1.34 1.41 1.48 1.51 1.59 1.75 1.60 1.62 1.94 1.38 1.40 1.37 1.39
Quick ratio 0.68 0.69 0.72 0.10 0.68 0.12 0.07 0.06 0.66 0.27 0.25 0.35 0.42 0.43 0.61 0.53 0.04 0.04 0.04 0.04
Cash ratio 0.09 0.11 0.12 0.10 0.08 0.12 0.07 0.06 0.08 0.27 0.25 0.35 0.42 0.43 0.61 0.53 0.04 0.04 0.04 0.04

The liquidity ratios of US Foods Holding Corp provide insights into the company's ability to meet its short-term obligations.

1. Current Ratio: This ratio measures the company's ability to cover its short-term liabilities with its current assets. The current ratio has been relatively stable over the period under review, ranging from 1.29 to 1.75. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally seen as a positive sign.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. The quick ratio has varied significantly, ranging from 0.06 to 0.72. A quick ratio below 1 suggests that the company may have difficulty meeting its short-term obligations without relying on selling inventory.

3. Cash Ratio: The cash ratio measures the company's ability to cover its current liabilities with its cash and cash equivalents. The cash ratio has also shown fluctuations, varying from 0.04 to 0.61. A higher cash ratio indicates that the company has a larger proportion of cash on hand relative to its current liabilities, which can be a sign of strong liquidity.

Overall, while the current ratio indicates that US Foods Holding Corp generally has sufficient current assets to cover its short-term obligations, the quick ratio and cash ratio suggest that the company may face challenges in meeting these obligations without relying on selling inventory or other assets to generate cash in certain periods. Investors and stakeholders should closely monitor these liquidity ratios to assess the company's ability to navigate short-term financial challenges.

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 14.26 12.55 12.53 -5.61 15.77 -4.64 -3.07 -2.97 18.63 -5.20 -4.84 -4.47 0.86 -3.70 -9.16 1.87 -0.42 -2.74 -4.06 -4.18

The cash conversion cycle for US Foods Holding Corp fluctuated throughout the periods highlighted in the table. A positive cash conversion cycle indicates that the company takes longer to convert its investments in inventory and other resources into cash inflows from sales. Conversely, a negative cash conversion cycle implies that the company is able to collect cash from sales before having to pay its suppliers, which can be a favorable position.

Analyzing the trend, we observe that the cash conversion cycle was mostly positive, indicating that the company took considerable time to convert its resources into cash. Notably, there were periods of negative cash conversion cycles, suggesting US Foods Holding Corp was operating more efficiently in these instances by collecting cash from customers before paying its suppliers.

It is essential to further investigate the reasons behind the fluctuations in the cash conversion cycle to understand the company's working capital management and overall financial health better. Additionally, comparing the cash conversion cycle with industry benchmarks could provide insights into the company's competitiveness and efficiency in managing its working capital.