Kraft Heinz Co. (NASDAQ:KHC)

The current ratio exhibited considerable fluctuation between 2015 and 2019. Initial values indicated a relatively comfortable liquidity position, which subsequently deteriorated before showing signs of recovery.

Overall Trend

The period began with a current ratio of 1.41 in 2015. This decreased significantly over the following two years, reaching a low of 0.72 in 2017. A subsequent increase was observed in 2018, rising to 1.21, followed by a slight decline to 1.03 in 2019.

Initial Decline (2015-2017)

From 2015 to 2017, the current ratio experienced a substantial downward trend. This was primarily driven by an increase in current liabilities, which rose from US$6,932 million to US$10,132 million, while current assets concurrently decreased from US$9,780 million to US$7,266 million. This suggests a weakening in the company’s ability to cover its short-term obligations with its short-term assets during this period.

Subsequent Recovery (2017-2019)

Following the low point in 2017, the current ratio improved in 2018. This improvement was attributable to a decrease in current liabilities, falling to US$7,503 million, coupled with an increase in current assets to US$9,075 million. However, the positive trend moderated in 2019, with the current ratio decreasing slightly to 1.03 as both current assets and current liabilities experienced modest changes.

Ratio Values

A current ratio below 1.0 in 2017 indicates that current liabilities exceeded current assets, potentially signaling short-term liquidity concerns. The ratios in 2018 and 2019, while above 1.0, remain relatively close to this threshold, suggesting a continued need for monitoring of short-term liquidity.