Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2012
- Net Profit Margin since 2012
- Debt to Equity since 2012
- Price to Operating Profit (P/OP) since 2012
- Price to Book Value (P/BV) since 2012
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Liquidity Ratios (Summary)
Kraft Foods Group Inc., liquidity ratios (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | |||||||||||||
| Quick ratio | |||||||||||||
| Cash ratio |
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
- Current Ratio
- The current ratio demonstrated fluctuations throughout the observed periods. Initially, it held steady at 1.47 for the first two quarters, increased to a peak of 1.67 in the third quarter of 2013, then declined to 1.44 by the end of 2013. From 2014 onwards, a downward trend is evident, with values dropping from 1.46 in the first quarter to 1.00 by the fourth quarter of 2014, stabilizing slightly at 1.02 in the first quarter of 2015. This pattern suggests a reduced short-term liquidity position over time.
- Quick Ratio
- The quick ratio aligns with the current ratio's downward trend in the later periods. Beginning at 0.73 for both the first and second quarters of 2013, it rose to 0.81 by the third quarter, then remained fairly constant near 0.80 at the end of 2013. The first quarter of 2014 showed a slight decrease to 0.76, followed by a more pronounced decline throughout the remainder of 2014, falling to as low as 0.47 in the third quarter before a minor increase to 0.50 at year-end. The ratio slightly dipped to 0.49 in the first quarter of 2015. The overall decline indicates a diminishing ability to cover current liabilities with the most liquid assets excluding inventory.
- Cash Ratio
- The cash ratio exhibited a similar downward trajectory, starting at 0.35 during the first quarter of 2013 and gradually increasing to 0.49 by the last quarter of the same year, reflecting improved cash and cash equivalents relative to current liabilities. However, the ratio deteriorated during 2014, declining consistently from 0.42 in the first quarter to a low of 0.22 in the third quarter, before a slight recovery to 0.27 by year-end. The first quarter of 2015 saw a minor decrease to 0.24. This trend indicates a reduction in the most liquid assets relative to liabilities, potentially signaling tighter cash management or cash flow challenges.
Current Ratio
Kraft Foods Group Inc., current ratio calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Current assets | |||||||||||||
| Current liabilities | |||||||||||||
| Liquidity Ratio | |||||||||||||
| Current ratio1 | |||||||||||||
| Benchmarks | |||||||||||||
| Current Ratio, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets show a relatively stable pattern over the analyzed periods, fluctuating between approximately 4.6 billion and 5.1 billion US dollars. There is no significant growth or decline, indicating steady asset levels available for short-term obligations.
- Current Liabilities
- Current liabilities exhibit more notable variation, increasing from around 2.9 billion US dollars at the end of September 2013 to nearly 4.9 billion US dollars by March 2015. The rise is particularly pronounced from March 2014 onwards, with a peak in June 2014, indicating a growing short-term debt burden.
- Current Ratio
- The current ratio, a measure of liquidity, declined over the periods from a range above 1.4 in 2013 and early 2014 to close to 1.0 by the end of 2014 and the first quarter of 2015. This downward trend reflects the increasing current liabilities relative to current assets, suggesting reduced liquidity and a tightening short-term financial position.
- Overall Analysis
- While current assets remain relatively constant, the rising current liabilities have led to a decreasing current ratio. The company's liquidity appears to weaken as the ability to cover short-term debts with current assets diminishes. Management may need to address this trend to ensure short-term obligations can be met without financial strain.
Quick Ratio
Kraft Foods Group Inc., quick ratio calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Cash and cash equivalents | |||||||||||||
| Receivables, net of allowances | |||||||||||||
| Total quick assets | |||||||||||||
| Current liabilities | |||||||||||||
| Liquidity Ratio | |||||||||||||
| Quick ratio1 | |||||||||||||
| Benchmarks | |||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Trend in Total Quick Assets
- The total quick assets demonstrate some fluctuations throughout the observed periods. Initial values remain relatively stable around 2,400 million US dollars, with a peak at the end of 2013 reaching approximately 2,734 million. A decline follows in late 2014, dropping to just above 2,000 million, before a modest recovery occurs by the first quarter of 2015, rising to roughly 2,397 million.
- Current Liabilities Movement
- Current liabilities present an overall increasing trend over the periods in question. Starting near 3,367 million US dollars in early 2013, liabilities experience some short-term decreases but predominantly escalate, culminating near 4,884 million by the first quarter of 2015. The largest increments are observed in mid to late 2014, with liabilities surpassing the 4,700 million mark.
- Quick Ratio Analysis
- The quick ratio exhibits a declining trend over the timeframe. Beginning at around 0.73 and peaking slightly at 0.81 in late 2013, it subsequently declines to 0.49 by early 2015. This indicates a diminishing ability to cover short-term obligations with liquid assets. Notably, there is a sharp drop in the quick ratio during 2014, reaching its lowest point at approximately 0.47 in the third quarter.
- Overall Financial Liquidity Insights
- The data suggests a reduction in liquidity over time, with quick assets exhibiting periodic decreases while current liabilities consistently rise. The steady decline in the quick ratio corroborates this observation, signaling potential increasing challenges in meeting short-term liabilities promptly using highly liquid assets.
Cash Ratio
Kraft Foods Group Inc., cash ratio calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Cash and cash equivalents | |||||||||||||
| Total cash assets | |||||||||||||
| Current liabilities | |||||||||||||
| Liquidity Ratio | |||||||||||||
| Cash ratio1 | |||||||||||||
| Benchmarks | |||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited fluctuations over the periods under consideration. Starting at 1,181 million USD in March 2013, cash assets slightly decreased to 1,164 million USD in June 2013, then increased to 1,231 million USD in September 2013. A significant peak occurred in December 2013 at 1,686 million USD, followed by a decline throughout 2014, reaching a low of 935 million USD in September 2014. Subsequently, cash assets recovered moderately to close at 1,178 million USD in March 2015. This pattern suggests intermittent liquidity spikes, possibly due to seasonal cash inflows or financial activities such as asset sales or short-term financing.
- Current Liabilities
- Current liabilities demonstrated an overall upward trend in the observed timeframe. Beginning at 3,367 million USD in March 2013, liabilities decreased gradually until September 2013, reaching 2,899 million USD. However, from December 2013 onward, liabilities rose significantly, peaking at 4,884 million USD in March 2015. Notably, there was a sharp increase between June 2014 and December 2014, indicating higher short-term obligations that could relate to increased operational expenses, working capital requirements, or refinancing activities. The steady rise in current liabilities may warrant attention to short-term financial stability.
- Cash Ratio
- The cash ratio, calculated as cash assets relative to current liabilities, generally declined over the stated periods. Initially balanced around 0.35 in early 2013, the ratio increased to 0.49 by December 2013, reflecting improved liquidity at that quarter. Subsequently, a declining trend ensued, reaching a low of 0.22 in September 2014 and slightly recovering to 0.24 in March 2015. The downtrend in the cash ratio corresponds with increasing current liabilities and decreasing cash assets during parts of the period, suggesting a tightening liquidity position and potentially increased risk in meeting short-term obligations solely through cash reserves.