Constellation Brands Inc. (NYSE:STZ)

Current ratio

The current ratio exhibited notable fluctuations over the period examined. It started at 1.2 in 2017, rising significantly to 1.79 in 2018. This was followed by a decline to 1.16 in 2019, indicating a decrease in current assets relative to current liabilities. The ratio then increased once again to 1.51 in 2020 and reached its highest value during the period at 2.4 in 2021, suggesting improved short-term liquidity that year. However, there was a noticeable decline to 1.23 in 2022, pointing to a reduction in liquidity compared to the previous year.

Quick ratio

The quick ratio showed a generally low but somewhat volatile trend. Beginning at 0.34 in 2017, it improved to 0.45 in 2018, and then declined to 0.3 in 2019. Subsequently, a slight recovery occurred, with the ratio increasing to 0.41 in 2020. A substantial increase was observed in 2021 when the ratio reached 0.98, indicating a much stronger position in terms of liquid assets excluding inventories. This improvement was not sustained, as the quick ratio fell back to 0.41 in 2022, aligning with earlier values.

Cash ratio

The cash ratio remained relatively low throughout the period, reflecting limited cash and cash equivalents in relation to current liabilities. Starting at 0.07 in 2017, it decreased slightly in 2018 and 2019 to 0.05 and 0.03 respectively. A marginal increase to 0.04 occurred in 2020, followed by a significant rise to 0.36 in 2021, which corresponds with peaks seen in other liquidity ratios that year. However, this ratio declined sharply back to 0.07 in 2022, indicating a reduced cash buffer.

The financial data reveals notable fluctuations in liquidity and short-term financial position over the six-year period analyzed.

Current Assets

Current assets displayed an overall increasing trend from 2017 through 2019, rising from 3,230,000 to 3,684,000 thousand US dollars. However, in 2020, there was a decline to 3,484,100 thousand, followed by a further decrease in 2021 to 3,044,500 thousand. In 2022, current assets recovered slightly, reaching 3,329,700 thousand.

Current Liabilities

Current liabilities exhibited considerable volatility. Starting at 2,697,600 thousand in 2017, they markedly decreased to 1,944,700 thousand in 2018, then sharply increased to 3,163,800 thousand in 2019. In the subsequent years, liabilities decreased again to 2,311,800 thousand in 2020 and further declined to a low of 1,269,100 thousand in 2021, before rising again to 2,698,800 thousand in 2022.

Current Ratio

The current ratio, reflecting the company's short-term liquidity, varied significantly across the period. It increased from 1.2 in 2017 to a peak of 1.79 in 2018, then dropped to 1.16 in 2019. In 2020, the ratio improved to 1.51, followed by a substantial increase to 2.4 in 2021, indicative of strong liquidity that year. This ratio decreased again to 1.23 in 2022, suggesting a return to a more moderate liquidity position.

Overall, the data indicates inconsistent trends in both current assets and liabilities, resulting in fluctuating liquidity levels. The sharp changes in the current ratio suggest shifts in working capital management or operational cycles during the analysed years. The notably high current ratio in 2021 could imply excess liquidity or conservative asset management, while the subsequent decrease in 2022 points to normalization of short-term financial stability.

Total quick assets

The total quick assets exhibit fluctuations over the period analyzed. Starting at 914,400 thousand USD in 2017, the value decreased to 866,500 thousand USD in 2018, followed by a rise to 940,500 thousand USD in 2019. A slight increase continued in 2020 with 946,200 thousand USD, then a significant increase to 1,245,900 thousand USD in 2021. However, in 2022, total quick assets declined to 1,098,400 thousand USD, indicating some volatility in liquid asset holdings.

Current liabilities

Current liabilities show a notably volatile pattern. The liabilities started at 2,697,600 thousand USD in 2017, decreased sharply to 1,944,700 thousand USD in 2018, then surged to 3,163,800 thousand USD in 2019. This was followed by a decline to 2,311,800 thousand USD in 2020 and a further reduction to 1,269,100 thousand USD in 2021. A sharp increase occurred again in 2022, returning to 2,698,800 thousand USD, which nearly matches the figure seen in 2017.

Quick ratio

The quick ratio, reflecting liquidity, exhibits significant variability throughout the timeline. It increased from 0.34 in 2017 to 0.45 in 2018, then decreased to 0.30 in 2019. An improvement occurred in 2020 with the ratio rising to 0.41, and a substantial peak at 0.98 in 2021, indicating a near parity between quick assets and current liabilities in that year. In 2022, however, the quick ratio dropped back to 0.41, suggesting a return to a comparatively lower level of immediate liquidity.

Total cash assets

The total cash assets exhibited significant fluctuations over the observed periods. Initially, there was a decline from 177,400 thousand US dollars in 2017 to 81,400 thousand US dollars in 2020, reflecting a reduction of more than 50%. However, this trend reversed sharply in 2021, with cash assets increasing substantially to 460,600 thousand US dollars. This spike was followed by a marked decrease to 199,400 thousand US dollars in 2022, though the amount remained higher than in the early years.

Current liabilities

Current liabilities showed high volatility throughout the periods. Starting at 2,697,600 thousand US dollars in 2017, liabilities decreased significantly to 1,269,100 in 2021, representing the lowest point in the series. However, in the latest period, liabilities increased once again to 2,698,800 thousand US dollars, reaching levels comparable to those at the beginning of the data range. This pattern indicates substantial variability in short-term obligations.

Cash ratio

The cash ratio, which measures the firm's ability to cover current liabilities with cash assets, remained low across the majority of periods, signaling a limited capacity to meet short-term obligations solely with cash. The ratio declined from 0.07 in 2017 to its lowest at 0.03 in 2019. There was a notable improvement in 2021 with a substantial increase to 0.36, mirroring the rapid increase in cash assets at that time. However, the cash ratio reverted to 0.07 in 2022, indicating a return to previous lower levels of liquidity relative to current liabilities.