Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Keurig Dr Pepper Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The analysis of the liquidity ratios reveals a consistent improvement in the company's short-term financial health over the observed periods.
- Current Ratio
- The current ratio shows a gradual upward trend from 0.33 at the beginning of 2020 to 0.56 by June 2022. This increase suggests the company has been strengthening its ability to cover short-term liabilities with current assets. Notably, the improvement is steady across quarters, with a more pronounced acceleration beginning in the first quarter of 2021 and continuing through the first half of 2022.
- Quick Ratio
- Similarly, the quick ratio exhibits a positive trajectory, rising from 0.18 in March 2020 to 0.28 by mid-2022. This ratio, which excludes inventory from current assets, indicates enhanced liquidity in more liquid assets. The progression is moderate but consistent, with a slight plateau observed in the middle of 2021 followed by renewed growth towards early 2022.
- Cash Ratio
- The cash ratio also increases overall, though it remains at relatively low absolute levels throughout the period. It starts at 0.03 in early 2020 and reaches a peak of 0.09 during the last quarter of 2021 and early 2022. The ratio temporarily dips in the middle of 2021 but recovers quickly, indicating fluctuations in cash holdings relative to current liabilities, but with a general trend toward greater cash availability.
Overall, the upward movement in all three liquidity measures suggests a trend of strengthening liquidity and increased capacity to meet immediate obligations. This pattern reflects a more prudent financial approach or improved operational cash flows, contributing to enhanced financial stability in the short term.
Current Ratio
Keurig Dr Pepper Inc., current ratio calculation (quarterly data)
| 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 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||
| Current assets | 3,771) | 3,490) | 3,057) | 2,803) | 2,616) | 2,665) | 2,388) | 2,416) | 2,240) | 2,277) | ||||
| Current liabilities | 6,761) | 6,448) | 6,485) | 6,795) | 6,917) | 7,225) | 7,694) | 7,329) | 7,298) | 6,858) | ||||
| Liquidity Ratio | ||||||||||||||
| Current ratio1 | 0.56 | 0.54 | 0.47 | 0.41 | 0.38 | 0.37 | 0.31 | 0.33 | 0.31 | 0.33 | ||||
| Benchmarks | ||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||
| Coca-Cola Co. | 1.13 | 1.18 | 1.13 | 1.52 | 1.47 | 1.33 | — | — | — | — | ||||
| Mondelēz International Inc. | 0.68 | 0.68 | 0.74 | 0.73 | 0.61 | 0.61 | — | — | — | — | ||||
| PepsiCo Inc. | 0.83 | 0.87 | 0.83 | 0.95 | 0.91 | 0.93 | — | — | — | — | ||||
| Philip Morris International Inc. | 0.89 | 0.92 | 0.92 | 1.00 | 1.18 | 1.18 | — | — | — | — | ||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= 3,771 ÷ 6,761 = 0.56
2 Click competitor name to see calculations.
- Current Assets
- The company's current assets demonstrate a general upward trend over the observed period. Starting at $2,277 million in March 2020, the value maintained relative stability throughout 2020, fluctuating slightly but ending the year at $2,388 million. From March 2021 onward, there is a more noticeable increase, rising steadily each quarter to reach $3,771 million by June 2022. This indicates improved liquidity or accumulation of short-term assets.
- Current Liabilities
- Current liabilities exhibit a decreasing trend, particularly noticeable after a peak in December 2020 at $7,694 million. From this high point, liabilities consistently decline to $6,761 million by June 2022. This reduction suggests efforts to manage or reduce short-term obligations, which could be indicative of strengthened financial discipline or repayment of short-term debt.
- Current Ratio
- The current ratio shows significant improvement throughout the timeframe analyzed. Initially low and relatively stable around 0.31 to 0.33 during 2020, the ratio begins to rise in 2021, moving from 0.37 in March to 0.47 by December. This upward trajectory continues into 2022, reaching 0.56 in June. The increasing current ratio reflects enhanced liquidity and a better capacity to cover current liabilities with current assets, which is a positive sign regarding the company's short-term financial health.
Quick Ratio
Keurig Dr Pepper Inc., quick ratio calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||
| Cash and cash equivalents | 552) | 592) | 567) | 200) | 167) | 335) | 240) | 191) | 149) | 197) | ||||
| Restricted cash and cash equivalents | 2) | 2) | 1) | 3) | 3) | 14) | 15) | 27) | 28) | 26) | ||||
| Trade accounts receivable, net | 1,326) | 1,214) | 1,148) | 1,138) | 1,075) | 1,065) | 1,048) | 1,051) | 1,010) | 1,037) | ||||
| Total quick assets | 1,880) | 1,808) | 1,716) | 1,341) | 1,245) | 1,414) | 1,303) | 1,269) | 1,187) | 1,260) | ||||
| Current liabilities | 6,761) | 6,448) | 6,485) | 6,795) | 6,917) | 7,225) | 7,694) | 7,329) | 7,298) | 6,858) | ||||
| Liquidity Ratio | ||||||||||||||
| Quick ratio1 | 0.28 | 0.28 | 0.26 | 0.20 | 0.18 | 0.20 | 0.17 | 0.17 | 0.16 | 0.18 | ||||
| Benchmarks | ||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||
| Coca-Cola Co. | 0.78 | 0.80 | 0.81 | 1.17 | 1.12 | 0.99 | — | — | — | — | ||||
| Mondelēz International Inc. | 0.32 | 0.35 | 0.42 | 0.43 | 0.30 | 0.32 | — | — | — | — | ||||
| PepsiCo Inc. | 0.59 | 0.63 | 0.56 | 0.65 | 0.66 | 0.68 | — | — | — | — | ||||
| Philip Morris International Inc. | 0.47 | 0.44 | 0.44 | 0.49 | 0.59 | 0.53 | — | — | — | — | ||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 1,880 ÷ 6,761 = 0.28
2 Click competitor name to see calculations.
- Quick Assets Trend
- The total quick assets exhibited moderate fluctuations over the observed periods with an overall upward trajectory. Starting at 1,260 million USD in the first quarter of 2020, the value showed a slight decline mid-year but progressively increased thereafter, reaching a peak of 1,880 million USD by the second quarter of 2022. This indicates a strengthening in liquid assets available over time.
- Current Liabilities Trend
- Current liabilities demonstrated variability within a relatively narrow range but with a declining trend toward the end of the timeframe. Beginning at 6,858 million USD in the first quarter of 2020, current liabilities peaked in the fourth quarter of 2020 at 7,694 million USD, followed by a general decrease to 6,761 million USD in the second quarter of 2022. This suggests a modest reduction in short-term obligations.
- Quick Ratio Analysis
- The quick ratio showed a general improvement across the quarters, reflecting enhanced short-term liquidity. It started at a low level of 0.18 in March 2020, dipped slightly during mid-2020, and then consistently rose to reach 0.28 by mid-2022. This increase implies improved ability to cover current liabilities using quick assets, which could be interpreted as a strengthening liquidity position.
- Summary Insights
- The data indicates an overall improvement in the company's liquidity and short-term financial health over the analyzed periods. The growth in quick assets combined with a slight reduction in current liabilities contributed to the upward trend in the quick ratio. This reflects a positive movement towards better liquidity management and a stronger capacity to meet short-term financial obligations.
Cash Ratio
Keurig Dr Pepper Inc., cash ratio calculation (quarterly data)
| 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 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||
| Cash and cash equivalents | 552) | 592) | 567) | 200) | 167) | 335) | 240) | 191) | 149) | 197) | ||||
| Restricted cash and cash equivalents | 2) | 2) | 1) | 3) | 3) | 14) | 15) | 27) | 28) | 26) | ||||
| Total cash assets | 554) | 594) | 568) | 203) | 170) | 349) | 255) | 218) | 177) | 223) | ||||
| Current liabilities | 6,761) | 6,448) | 6,485) | 6,795) | 6,917) | 7,225) | 7,694) | 7,329) | 7,298) | 6,858) | ||||
| Liquidity Ratio | ||||||||||||||
| Cash ratio1 | 0.08 | 0.09 | 0.09 | 0.03 | 0.02 | 0.05 | 0.03 | 0.03 | 0.02 | 0.03 | ||||
| Benchmarks | ||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||
| Coca-Cola Co. | 0.57 | 0.55 | 0.63 | 0.93 | 0.85 | 0.76 | — | — | — | — | ||||
| Mondelēz International Inc. | 0.14 | 0.14 | 0.25 | 0.24 | 0.14 | 0.14 | — | — | — | — | ||||
| PepsiCo Inc. | 0.21 | 0.27 | 0.23 | 0.27 | 0.24 | 0.29 | — | — | — | — | ||||
| Philip Morris International Inc. | 0.25 | 0.23 | 0.23 | 0.25 | 0.31 | 0.26 | — | — | — | — | ||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 554 ÷ 6,761 = 0.08
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited fluctuations over the analyzed periods, starting at 223 million USD in March 2020 and reaching a peak of 594 million USD in March 2022. Notably, there was a significant increase from 203 million USD in September 2021 to 568 million USD in December 2021. After this peak, the cash balance remained relatively stable, with a slight decline to 554 million USD by June 2022.
- Current Liabilities
- Current liabilities showed a generally decreasing trend over time. The liabilities started at 6,858 million USD in March 2020 and reduced to around 6,448 million USD by March 2022. Despite some short-term fluctuations, including a high of 7,694 million USD in December 2020 and subsequent declines, the overall direction suggests a gradual reduction in short-term obligations.
- Cash Ratio
- The cash ratio demonstrated volatility with generally low values throughout the observation period, reflecting the proportion of cash assets to current liabilities. Initially, the cash ratio was between 0.02 and 0.03 in early 2020. It improved notably by December 2021, reaching 0.09, indicating improved liquidity. This elevated liquidity level was maintained through March and June 2022, with minor fluctuations, suggesting strengthened short-term financial stability.
- Summary Insights
- Overall, the data indicates an improvement in liquidity, supported by increasing cash assets and a rising cash ratio in the latter periods. Concurrently, the company appears to have managed to modestly reduce current liabilities over time, potentially improving its capacity to meet short-term obligations. The significant jump in cash holdings in late 2021 is a key factor contributing to higher liquidity ratios during the recent quarters analyzed.