Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Kraft Heinz Co., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
- Current Ratio Trend
- The current ratio fluctuates over the observed periods, starting at a relatively strong 1.46 in April 2016, then experiencing a notable decline through the remainder of 2016 and 2017, reaching lows around 0.72 by the end of 2017 and early 2018. Subsequently, it shows a recovery trend with intermittent rises and falls, peaking again at 1.48 in March 2020 before a slight decrease to 1.09 by June 2020. This indicates that the company's ability to cover short-term liabilities with current assets weakened during the middle periods but improved significantly in the most recent periods.
- Quick Ratio Trend
- The quick ratio displays a marked downward trend from 0.88 in April 2016 to a low of approximately 0.29 by December 2017, reflecting a substantial reduction in highly liquid assets relative to current liabilities. After this low, the ratio experiences some recovery, fluctuating modestly but generally remaining below 0.6 until a sharp increase to 0.97 in March 2020. By June 2020, it declines again to 0.6. This pattern suggests varying liquidity pressures, with a notable improvement in early 2020, possibly indicating a temporary accumulation of liquid assets or reduction in current liabilities.
- Cash Ratio Trend
- The cash ratio follows a consistent decreasing trend from 0.62 in April 2016 to a trough near 0.14 in early 2019, evidencing a diminishing proportion of cash and cash equivalents relative to current liabilities. There is a subsequent gradual increase, reaching a peak of 0.68 in March 2020, before dropping to 0.35 in June 2020. This reveals constrained immediate liquidity in the middle periods, with a significant recovery in cash availability or reduction in short-term obligations around early 2020, though not sustained in the following quarter.
- Overall Liquidity Insights
- The analyzed liquidity ratios collectively highlight a period of weakened short-term financial health during 2017 and 2018, characterized by lower current, quick, and cash ratios. The improvements observed in early 2020 across all three ratios suggest efforts to strengthen liquidity, potentially in response to changing market or operational conditions. However, the subsequent partial declines indicate volatility or challenges in maintaining elevated liquidity levels.
Current Ratio
Kraft Heinz Co., current ratio calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | 8,776) | 11,708) | 8,097) | 9,125) | 9,168) | 8,835) | 9,075) | 7,590) | 9,501) | 7,437) | 7,266) | 7,228) | 7,108) | 8,875) | 8,753) | 8,943) | 9,347) | 9,812) | ||||||
| Current liabilities | 8,050) | 7,934) | 7,875) | 9,112) | 7,797) | 7,972) | 7,503) | 7,581) | 9,091) | 10,329) | 10,132) | 9,387) | 7,356) | 9,383) | 9,501) | 9,414) | 9,593) | 6,730) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Current ratio1 | 1.09 | 1.48 | 1.03 | 1.00 | 1.18 | 1.11 | 1.21 | 1.00 | 1.05 | 0.72 | 0.72 | 0.77 | 0.97 | 0.95 | 0.92 | 0.95 | 0.97 | 1.46 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||
| Coca-Cola Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Mondelēz International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| PepsiCo Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Philip Morris International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q2 2020 Calculation
Current ratio = Current assets ÷ Current liabilities
= 8,776 ÷ 8,050 = 1.09
2 Click competitor name to see calculations.
- Current Assets
- Current assets showed fluctuations throughout the observed periods. Initially, there was a slight decline from 9,812 million US dollars in early April 2016 to approximately 7,108 million by mid-2017. Subsequently, current assets experienced an upward trend until early 2018, reaching over 9,500 million. After some volatility, values generally remained within the 8,000 to 9,000 million range, except for a peak in March 2020 where current assets reached approximately 11,708 million before declining again to 8,776 million by June 2020.
- Current Liabilities
- Current liabilities demonstrated a more irregular pattern with substantial variation over the quarters. Starting around 6,730 million in April 2016, liabilities rose sharply to over 9,500 million by mid-2016 and remained elevated near 9,300 to 10,300 million for much of 2017 and early 2018. Thereafter, liabilities decreased and fluctuated between 7,500 and 8,000 million during late 2018 through mid-2020, maintaining a somewhat stable but elevated level relative to the early periods.
- Current Ratio
- Reflecting the interplay between current assets and current liabilities, the current ratio showed a decline from 1.46 in early April 2016 to a low near 0.72 by late 2017 and early 2018, indicating potential short-term liquidity constraints during that period. Subsequently, the ratio improved and surpassed 1.0 starting from late 2018, peaking at 1.48 in March 2020. This improvement suggests an enhanced ability to cover short-term obligations in recent periods compared to the earlier years. The ratio settled around 1.09 by June 2020.
- Overall Analysis
- Over the observed timeframe, the company's liquidity position showed volatility with a period of tightened short-term liquidity around 2017 to early 2018, as evidenced by a current ratio below 1.0. Current liabilities were relatively high during this period, outpacing current assets. However, there was a noticeable recovery in liquidity starting from late 2018, with the current ratio improving above 1.0, indicating strengthened short-term financial health. The peak in current assets in early 2020, coupled with a stable level of current liabilities, contributed to the highest current ratio observed, suggesting a strong liquidity position at that time. The data indicates responsiveness in managing working capital components to address liquidity challenges.
Quick Ratio
Kraft Heinz Co., quick ratio calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cash and cash equivalents | 2,812) | 5,403) | 2,279) | 2,315) | 1,452) | 1,096) | 1,130) | 1,366) | 3,369) | 1,794) | 1,629) | 1,441) | 1,445) | 3,242) | 4,204) | 3,920) | 4,237) | 4,199) | ||||||
| Trade receivables, net of allowances | 2,045) | 2,321) | 1,973) | 1,959) | 2,049) | 2,010) | 2,129) | 2,032) | 1,950) | 1,044) | 921) | 938) | 913) | 886) | 769) | 855) | 1,114) | 939) | ||||||
| Sold receivables | —) | —) | —) | —) | —) | —) | —) | —) | 37) | 530) | 353) | 427) | 521) | 588) | 129) | 208) | 146) | 805) | ||||||
| Total quick assets | 4,857) | 7,724) | 4,252) | 4,274) | 3,501) | 3,106) | 3,259) | 3,398) | 5,356) | 3,368) | 2,903) | 2,806) | 2,879) | 4,716) | 5,102) | 4,983) | 5,497) | 5,943) | ||||||
| Current liabilities | 8,050) | 7,934) | 7,875) | 9,112) | 7,797) | 7,972) | 7,503) | 7,581) | 9,091) | 10,329) | 10,132) | 9,387) | 7,356) | 9,383) | 9,501) | 9,414) | 9,593) | 6,730) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Quick ratio1 | 0.60 | 0.97 | 0.54 | 0.47 | 0.45 | 0.39 | 0.43 | 0.45 | 0.59 | 0.33 | 0.29 | 0.30 | 0.39 | 0.50 | 0.54 | 0.53 | 0.57 | 0.88 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||
| Coca-Cola Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Mondelēz International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| PepsiCo Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Philip Morris International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q2 2020 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 4,857 ÷ 8,050 = 0.60
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals distinct patterns and shifts in the company's liquidity position over the observed periods.
- Total Quick Assets
- This metric shows fluctuations with an overall tendency towards volatility. Initially, there is a gradual decline from around 5,943 million US dollars to a low point near 2,879 million in mid-2017. Subsequently, a modest recovery occurs, peaking sharply at 7,724 million by early 2020 before falling again to approximately 4,857 million. These swings suggest periodic replenishments of liquid assets, interspersed with significant drawdowns.
- Current Liabilities
- The current liabilities sequencing indicates considerable variability but maintains a generally elevated level. Starting near 6,730 million US dollars, liabilities increase to a peak exceeding 10,300 million towards early 2018. Following this, a downward adjustment to around 7,500 million occurs, then a mild resurgence is noted, with values hovering between 7,800 and 8,000 million into mid-2020. The high level of current liabilities relative to assets denotes ongoing short-term obligations requiring attention.
- Quick Ratio
- The quick ratio, reflecting short-term liquidity, manifests a pattern of decline and recovery. Early ratios near 0.88 decrease significantly to lows around 0.29 by late 2017, indicating reduced ability to cover current liabilities with quick assets during this period. Subsequent quarters see a gradual improvement, with a notable spike to 0.97 in early 2020, followed by a fallback to 0.60. Despite the fluctuations, the ratio largely remains below the generally recommended benchmark of 1, suggesting constrained liquidity and potential pressure to meet immediate financial obligations throughout much of the period.
Overall, the liquidity profile is characterized by substantial variation, with intermittent enhancements in quick assets not consistently aligning with liability levels. The quick ratio’s low points highlight episodes of tight liquidity conditions, while spikes imply temporary strengthening of financial fluidity. Continuous monitoring and management of current liabilities and liquid assets appear critical to maintaining a stable short-term financial position.
Cash Ratio
Kraft Heinz Co., cash ratio calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cash and cash equivalents | 2,812) | 5,403) | 2,279) | 2,315) | 1,452) | 1,096) | 1,130) | 1,366) | 3,369) | 1,794) | 1,629) | 1,441) | 1,445) | 3,242) | 4,204) | 3,920) | 4,237) | 4,199) | ||||||
| Total cash assets | 2,812) | 5,403) | 2,279) | 2,315) | 1,452) | 1,096) | 1,130) | 1,366) | 3,369) | 1,794) | 1,629) | 1,441) | 1,445) | 3,242) | 4,204) | 3,920) | 4,237) | 4,199) | ||||||
| Current liabilities | 8,050) | 7,934) | 7,875) | 9,112) | 7,797) | 7,972) | 7,503) | 7,581) | 9,091) | 10,329) | 10,132) | 9,387) | 7,356) | 9,383) | 9,501) | 9,414) | 9,593) | 6,730) | ||||||
| Liquidity Ratio | ||||||||||||||||||||||||
| Cash ratio1 | 0.35 | 0.68 | 0.29 | 0.25 | 0.19 | 0.14 | 0.15 | 0.18 | 0.37 | 0.17 | 0.16 | 0.15 | 0.20 | 0.35 | 0.44 | 0.42 | 0.44 | 0.62 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||
| Coca-Cola Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Mondelēz International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| PepsiCo Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Philip Morris International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q2 2020 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,812 ÷ 8,050 = 0.35
2 Click competitor name to see calculations.
- Total Cash Assets
-
Total cash assets demonstrated notable fluctuations over the observed quarters, beginning at approximately 4.2 billion US dollars in early 2016 and declining to around 1.4 billion by late 2017. The asset level experienced occasional recoveries, including a significant rise in mid-2018 to about 3.4 billion, followed by another decrease towards the end of 2018 and early 2019. The trend from 2019 to mid-2020 showed greater volatility with a sharp increase to over 5.4 billion in the first quarter of 2020, then a subsequent drop to approximately 2.8 billion by mid-2020. This pattern suggests episodic cash inflows and outflows impacting the company's liquidity position significantly over time.
- Current Liabilities
-
Current liabilities remained relatively elevated and volatile throughout the periods analyzed, starting slightly above 6.7 billion US dollars in early 2016 and reaching levels near 10.3 billion by early 2018. After this peak, liabilities exhibited a downward trend with fluctuations, maintaining values mostly between 7.5 billion and 9.1 billion from mid-2018 through mid-2020. The data indicates sustained high current obligations, with occasional contractions but without a clear consistent reduction trend, suggesting continued operational or financial commitments requiring short-term settlement.
- Cash Ratio
-
The cash ratio underwent a general decline from 0.62 in early 2016 to lows near 0.14 to 0.16 in 2018 and 2019, indicating a weakening immediate liquidity position relative to current liabilities during that time. However, there were intermittent improvements, particularly notable in mid-2018 and early 2020 when the ratio rose to approximately 0.37 and 0.68 respectively, reflecting periodic enhancements in cash availability or reductions in short-term liabilities. The ratio's volatility highlights challenges in maintaining stable liquidity buffers relative to obligations.
- Overall Analysis
-
The financial data reflect pronounced variability in cash assets against a backdrop of high and fluctuating current liabilities, resulting in cash ratios that suggest inconsistent liquidity management. Periods of increased cash holdings, especially in early 2020, may point to strategic cash accumulation or inflows, possibly to mitigate liabilities or prepare for operational demands. Conversely, prolonged low cash ratios in earlier years indicate periods of tighter liquidity. The company faces an ongoing need to balance cash reserves with current obligations to maintain financial stability.