Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Analysis of Geographic Areas
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2008
- Net Profit Margin since 2008
- Operating Profit Margin since 2008
- Return on Equity (ROE) since 2008
- Price to Operating Profit (P/OP) since 2008
- Price to Sales (P/S) since 2008
- Aggregate Accruals
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Liquidity Ratios (Summary)
Keurig Dr Pepper Inc., liquidity ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Current Ratio
- The current ratio exhibits a declining trend from 0.38 in 2018 to 0.31 in 2020, followed by a notable recovery to 0.47 in 2021. This indicates that the company's short-term liquidity initially weakened over three years but improved significantly in the final year under review, suggesting a better ability to cover current liabilities with current assets at the end of 2021.
- Quick Ratio
- The quick ratio mirrors the pattern observed in the current ratio, starting at 0.22 in 2018 and decreasing progressively to 0.17 in 2020, then rising to 0.26 in 2021. Despite improved liquidity in 2021, the ratio remains below 1.0 across all years, which may imply limited availability of liquid assets that can quickly cover current obligations excluding inventory.
- Cash Ratio
- The cash ratio remains very low throughout the period, starting at 0.02 in both 2018 and 2019, slightly increasing to 0.03 in 2020, and then seeing a significant rise to 0.09 in 2021. This increase denotes an enhanced capacity to cover current liabilities solely with cash and cash equivalents, although the ratio still reflects a relatively low cash cushion.
Current Ratio
Keurig Dr Pepper Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Current assets | |||||
| Current liabilities | |||||
| Liquidity Ratio | |||||
| Current ratio1 | |||||
| Benchmarks | |||||
| Current Ratio, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Current Ratio, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Current Ratio, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets showed a consistent upward trend over the four-year period. Starting from 2,159 million US dollars at the end of 2018, they increased steadily each year, reaching 3,057 million US dollars by the end of 2021. This reflects a gradual strengthening of the company's short-term asset base.
- Current Liabilities
- Current liabilities exhibited fluctuations during the timeframe analyzed. They rose noticeably from 5,702 million US dollars in 2018 to a peak of 7,694 million US dollars in 2020, indicating a rising short-term obligation. However, by the end of 2021, current liabilities decreased to 6,485 million US dollars, suggesting a partial reduction in the current debt burden.
- Current Ratio
- The current ratio, which measures liquidity by comparing current assets to current liabilities, displayed a declining trend from 0.38 in 2018 to a low of 0.31 in 2020, reflecting a deterioration in the company's ability to cover short-term liabilities with short-term assets. There was a notable recovery in 2021 when the current ratio improved to 0.47, indicating a better liquidity position relative to previous years, though it remained below 1.0, signaling continued reliance on external financing or less liquidity cushion.
- Overall Analysis
- Throughout the period, current assets consistently increased, which is a positive sign for liquidity. Nevertheless, rising current liabilities through 2020 put pressure on liquidity ratios, with a current ratio dropping below 0.4. The improvement in 2021's current ratio suggests management efforts to enhance liquidity or reduce short-term obligations. Despite this improvement, the liquidity position remains relatively weak, as the current ratio is still under 1, indicating that current liabilities exceed current assets.
Quick Ratio
Keurig Dr Pepper Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Cash and cash equivalents | |||||
| Restricted cash and restricted cash equivalents | |||||
| Trade accounts receivable, net | |||||
| Total quick assets | |||||
| Current liabilities | |||||
| Liquidity Ratio | |||||
| Quick ratio1 | |||||
| Benchmarks | |||||
| Quick Ratio, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Quick Ratio, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Quick Ratio, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibited a moderate increase over the four-year period. Starting at 1,279 million USD in 2018, the value slightly declined to 1,216 million USD in 2019, then rebounded to 1,303 million USD in 2020, and significantly rose to 1,716 million USD in 2021. This indicates an overall positive trend in the company's liquid assets available for immediate use.
- Current Liabilities
- Current liabilities increased from 5,702 million USD in 2018 to a peak of 7,694 million USD in 2020, followed by a reduction to 6,485 million USD in 2021. This reflects a general rise in short-term obligations over the first three years, with a notable decrease in the final year.
- Quick Ratio
- The quick ratio, representing the company's ability to meet short-term liabilities with its most liquid assets, showed a declining trend from 0.22 in 2018 to 0.17 in 2020, indicating a weakening liquidity position. However, there was an improvement to 0.26 in 2021, suggesting enhanced short-term financial health relative to earlier years.
Cash Ratio
Keurig Dr Pepper Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Cash and cash equivalents | |||||
| Restricted cash and restricted cash equivalents | |||||
| Total cash assets | |||||
| Current liabilities | |||||
| Liquidity Ratio | |||||
| Cash ratio1 | |||||
| Benchmarks | |||||
| Cash Ratio, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Cash Ratio, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Cash Ratio, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets demonstrated a notable upward trajectory over the examined period. Starting at 129 million US dollars at the end of 2018, the cash reserves slightly decreased to 101 million US dollars in 2019. However, the company experienced a significant increase in cash assets in 2020, reaching 255 million US dollars, which more than doubled by the end of 2021 to 568 million US dollars. This substantial accumulation of cash suggests enhanced liquidity and a stronger cash position toward the latter years.
- Current liabilities
- Current liabilities showed some fluctuation across the four years. The liabilities rose from 5,702 million US dollars at the end of 2018 to peak at 7,694 million US dollars in 2020. Subsequently, there was a decrease to 6,485 million US dollars by the end of 2021. Although the liabilities remained elevated compared to 2018 and 2019, the reduction in 2021 may indicate improved short-term obligation management or repayment of certain liabilities.
- Cash ratio
- The cash ratio, which reflects the company's ability to cover current liabilities with its cash and cash equivalents, remained relatively low but showed a growing trend over the period. It was stable at 0.02 in both 2018 and 2019, rose slightly to 0.03 in 2020, and then sharply increased to 0.09 in 2021. This upward trend in the cash ratio aligns with the significant increase in cash assets observed and suggests an enhanced capacity to meet short-term liabilities solely with cash by the end of 2021.