Yum! Brands Inc (YUM)

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 1.26 1.13 1.02 0.99 0.97 1.28 1.21 1.04 1.08 1.52 0.97 0.98 1.01 1.31 1.63 1.33 0.99 1.57 0.95 0.89
Quick ratio 1.01 0.89 0.76 0.64 0.64 0.81 0.85 0.71 0.80 1.14 0.69 0.72 0.78 1.05 1.20 1.11 0.80 1.23 0.66 0.62
Cash ratio 0.42 0.46 0.32 0.24 0.24 0.34 0.35 0.28 0.34 0.74 0.35 0.38 0.44 0.71 0.84 0.77 0.39 0.70 0.21 0.21

The liquidity ratios of Yum Brands Inc. indicate the company's ability to meet its short-term obligations and cover its current liabilities.

The current ratio, which measures the company's ability to pay its short-term obligations with its current assets, has shown fluctuation over the quarters. It was highest at 1.26 in Q4 2023 and lowest at 0.97 in Q4 2022. Generally, a current ratio above 1 indicates that the company has more current assets than liabilities, which is favorable.

The quick ratio, also known as the acid-test ratio, provides a stricter measure of liquidity by excluding inventory from current assets. Yum Brands Inc.'s quick ratio has been relatively stable, ranging from 1.02 to 1.13 over the quarters. A quick ratio of 1 or higher is considered healthy, indicating the company has enough liquid assets to cover its short-term liabilities.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, shows the company's ability to cover its current liabilities with its most liquid assets. Yum Brands Inc.'s cash ratio has varied between 0.31 and 0.70, with the highest value observed in Q3 2022. A higher cash ratio suggests a stronger ability to cover short-term obligations with cash on hand.

Overall, Yum Brands Inc.'s liquidity ratios demonstrate a generally healthy liquidity position, with improvements seen in certain quarters. However, management should continue to monitor and maintain adequate levels of liquidity to ensure the company can meet its short-term financial obligations.

See also:

Yum! Brands Inc Liquidity Ratios (Quarterly Data)

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 39.05 33.45 34.25 32.71 87.27 31.48 32.68 31.03 35.81 31.07 30.52 31.56 36.75 34.00 35.21 33.27 15.09 35.22 35.42 35.58

The cash conversion cycle for Yum Brands Inc. has shown fluctuations over the past eight quarters. In Q4 2023 and Q4 2022, the company's cash conversion cycle was negative, indicating that it efficiently converted its inventory and accounts receivable into cash. However, in Q3 and Q2 2023, as well as Q3 and Q2 2022, the cash conversion cycle was positive, suggesting a longer period to convert inventory and accounts receivable into cash.

Q3 2023 had the highest cash conversion cycle at 33.45 days, while Q1 2023 had the lowest at 32.71 days. This indicates that the company took the longest time to convert its resources into cash in Q3 2023 and the shortest time in Q1 2023, relatively speaking.

Overall, the trend in the cash conversion cycle for Yum Brands Inc. has been somewhat volatile, with periods of efficiency followed by periods of inefficiency in converting its operating assets into cash. It would be important for the company to analyze the factors contributing to these fluctuations and work towards maintaining a more stable and efficient cash conversion cycle in the future.