Yum! Brands Inc (YUM)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	616,000	512,000	367,000	486,000	730,000
Short-term investments	US$ in thousands	91,000	0	26,000	—	—
Total current liabilities	US$ in thousands	1,269,000	1,277,000	1,665,000	1,415,000	1,675,000
Cash ratio		0.56	0.40	0.24	0.34	0.44

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($616,000K + $91,000K) ÷ $1,269,000K
= 0.56

Based on the provided data, Yum! Brands Inc's cash ratio has fluctuated over the past five years. The cash ratio, which is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, was 0.44 as of December 31, 2020. This indicates that the company had $0.44 of cash and cash equivalents for every $1 of its current liabilities at that time.

However, the cash ratio decreased to 0.34 by December 31, 2021, suggesting a lower ability to cover short-term obligations with cash and cash equivalents compared to the previous year. The ratio further declined to 0.24 by December 31, 2022, indicating a significant decrease in liquidity.

On a positive note, the cash ratio improved to 0.40 by December 31, 2023, signaling a better ability to meet short-term obligations with available cash. The most recent data point, as of December 31, 2024, shows a cash ratio of 0.56, representing a substantial increase in liquidity compared to the previous year.

Overall, the fluctuation in Yum! Brands Inc's cash ratio over the five-year period highlights the company's changing ability to meet short-term obligations with cash and cash equivalents, with improvements in some years and declines in others. Investors and stakeholders may monitor this trend to assess the company's liquidity position and financial health.