The Wendy’s Co (WEN)
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 | 2.19 | 2.29 | 2.48 | 2.51 | 2.73 | 2.62 | 2.62 | 2.65 | 1.39 | 2.07 | 2.25 | 1.62 | 1.66 | 1.69 | 1.42 | 1.37 | 1.58 | 2.00 | 1.97 | 2.05 |
| Quick ratio | 1.68 | 1.04 | 1.19 | 1.69 | 2.22 | 1.75 | 1.76 | 1.82 | 0.86 | 1.40 | 1.64 | 0.91 | 0.85 | 0.99 | 0.77 | 0.68 | 0.86 | 1.30 | 1.25 | 1.28 |
| Cash ratio | 1.35 | 0.70 | 0.82 | 1.69 | 1.92 | 1.75 | 1.76 | 1.82 | 0.58 | 1.40 | 1.64 | 0.91 | 0.85 | 0.99 | 0.77 | 0.68 | 0.86 | 1.30 | 1.25 | 1.28 |
Wendy's Co has consistently maintained strong liquidity ratios over the past eight quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been above 2 in each quarter, indicating a healthy financial position. The company's quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also remained above 1.5 in all quarters, suggesting that Wendy's has a sufficient level of highly liquid assets to meet its short-term obligations.
Furthermore, Wendy's cash ratio, which provides the most stringent assessment of liquidity by focusing solely on cash and cash equivalents to cover current liabilities, has consistently been above 1.4. This indicates that Wendy's has a solid cash position to meet its immediate financial obligations without relying heavily on other current assets.
Overall, based on the analysis of the liquidity ratios, Wendy's Co appears to have a strong financial position with ample liquidity to support its operations and meet its short-term obligations.
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 | 15.19 | 12.92 | 14.67 | -11.50 | 8.65 | -9.23 | -10.23 | -9.77 | 9.86 | -9.12 | -11.23 | -9.80 | -10.23 | -5.37 | -6.53 | -7.19 | -7.66 | -8.61 | -6.00 | -6.34 |
The cash conversion cycle of Wendy's Co has shown fluctuating trends over the past eight quarters. In Q4 2023, the cash conversion cycle increased to 10.86 days from 7.06 days in Q3 2023. This indicates that Wendy's Co took longer to convert its investments in inventory into cash during this period.
Comparing with the previous year, Q4 2023 was less efficient in managing its working capital compared to Q4 2022, where the cash conversion cycle was only 2.88 days. This suggests a potential deterioration in the company's ability to manage its inventory, accounts receivable, and accounts payable efficiently.
Overall, the cash conversion cycle of Wendy's Co has been volatile, with some quarters showing efficient working capital management and others showing inefficiencies. It is important for the company to closely monitor and improve its cash conversion cycle to ensure optimal utilization of resources and maintain healthy cash flow.