Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Kellanova, liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 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).
- Current Ratio Trends
- The current ratio demonstrates a generally fluctuating pattern over the observed periods. Starting at 0.68 in March 2019, it rose slightly to a peak of 0.8 in September 2019 before declining to 0.66 by December 2020. The ratio experienced intermittent increases and decreases afterward, reaching as high as 0.76 in July 2021 and September 2023 but falling back to 0.62 in March 2024. Overall, the current ratio remained below 1 throughout, indicating consistent challenges in meeting short-term liabilities with current assets.
- Quick Ratio Patterns
- The quick ratio follows a similar fluctuating trend as the current ratio but at lower absolute levels, reflecting a more conservative measure of liquidity by excluding inventory. It increased from 0.38 in March 2019 to a high of 0.53 in September 2020, then declined to 0.33 in April 2022. Following this trough, minor improvements are apparent, peaking at 0.46 in September 2023 before settling around 0.35–0.4 in the latest periods. These fluctuations suggest variability in liquid asset management and reliance on near-cash assets to cover short-term obligations.
- Cash Ratio Analysis
- The cash ratio indicates the most conservative liquidity measure, representing the proportion of cash and cash equivalents to current liabilities. It shows notable volatility, initially very low at 0.05 in March 2019, rising steadily to 0.26 by September 2020. However, it sharply declined afterward, stabilizing at lower levels between 0.05 and 0.08 for a considerable span. A pronounced spike occurred again in September 2023 to 0.17 before dropping back to near the earlier low range. This pattern reflects episodic variations in cash holdings relative to liabilities, with generally limited cash reserves throughout the timeline.
- Liquidity Insights
- Overall, the liquidity ratios reveal that the entity operates with relatively tight short-term liquidity, as all ratios remain below or near benchmark levels that would indicate a secure short-term financial position. The recurring declines in the current and quick ratios after peaks suggest some susceptibility to decreases in asset liquidity or increases in current liabilities. The cash ratio's low and variable levels reinforce a modest cash buffer. These findings imply a need for vigilant liquidity management to maintain operational stability, especially in periods marked by declining ratio values.
Current Ratio
Kellanova, current ratio calculation (quarterly data)
| Jun 29, 2024 | Mar 30, 2024 | Dec 30, 2023 | Sep 30, 2023 | Jul 1, 2023 | Apr 1, 2023 | Dec 31, 2022 | Oct 1, 2022 | Jul 2, 2022 | Apr 2, 2022 | Dec 31, 2021 | Oct 2, 2021 | Jul 3, 2021 | Apr 3, 2021 | Dec 31, 2020 | Sep 26, 2020 | Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current assets | 3,470) | 3,450) | 3,330) | 4,986) | 4,288) | 4,324) | 4,186) | 4,444) | 4,261) | 3,816) | 3,394) | 3,799) | 3,747) | 3,639) | 3,482) | 4,753) | 4,492) | 4,290) | 3,431) | 3,492) | 3,504) | 3,373) | |||||||
| Current liabilities | 4,774) | 5,525) | 5,060) | 6,524) | 6,476) | 6,001) | 6,349) | 6,033) | 6,051) | 5,848) | 5,315) | 5,029) | 4,946) | 5,385) | 5,238) | 6,034) | 5,856) | 5,595) | 4,778) | 4,389) | 4,989) | 4,978) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Current ratio1 | 0.73 | 0.62 | 0.66 | 0.76 | 0.66 | 0.72 | 0.66 | 0.74 | 0.70 | 0.65 | 0.64 | 0.76 | 0.76 | 0.68 | 0.66 | 0.79 | 0.77 | 0.77 | 0.72 | 0.80 | 0.70 | 0.68 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | 1.08 | 1.04 | 1.13 | 1.14 | 1.14 | 1.15 | 1.15 | 1.13 | 1.13 | 1.18 | 1.13 | 1.52 | 1.47 | 1.33 | 1.32 | 1.13 | 1.09 | 0.87 | — | — | — | — | |||||||
| Mondelēz International Inc. | 0.68 | 0.77 | 0.62 | 0.61 | 0.65 | 0.68 | 0.60 | 0.69 | 0.68 | 0.68 | 0.74 | 0.73 | 0.61 | 0.61 | 0.66 | 0.74 | 0.55 | 0.53 | — | — | — | — | |||||||
| PepsiCo Inc. | 0.83 | 0.86 | 0.85 | 0.88 | 0.84 | 0.87 | 0.80 | 0.92 | 0.83 | 0.87 | 0.83 | 0.95 | 0.91 | 0.93 | 0.98 | 0.93 | 0.97 | 1.10 | — | — | — | — | |||||||
| Philip Morris International Inc. | 0.94 | 0.94 | 0.75 | 0.89 | 0.85 | 0.85 | 0.72 | 0.92 | 0.89 | 0.92 | 0.92 | 1.00 | 1.18 | 1.18 | 1.10 | 1.12 | 1.13 | 1.02 | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 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).
1 Q2 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 3,470 ÷ 4,774 = 0.73
2 Click competitor name to see calculations.
The analysis of current assets and current liabilities over the reported periods reveals notable fluctuations and trends. Current assets initially increased from approximately 3,373 million USD in March 2019 to a peak near 4,753 million USD by September 2020, indicating a period of asset growth in the short term. Following this peak, current assets experienced variability, with a general decline toward the end of 2021, before recovering again to levels above 4,400 million USD in late 2022. However, from early 2023 onwards, current assets showed a downward trend, dropping to approximately 3,330 million USD by March 2024, with a slight increase to 3,470 million USD recorded by June 2024.
Current liabilities displayed a generally upward trend from March 2019 through the end of 2023. Beginning at around 4,978 million USD, current liabilities grew steadily to a high exceeding 6,500 million USD near the end of 2023, with some intermittent periods of minor reductions. Notably, liabilities fell to about 5,060 million USD in the first quarter of 2024 and further declined to approximately 4,774 million USD by June 2024.
The current ratio, representing the relationship between current assets and current liabilities, mostly remained below 1.0 throughout the timeframe, indicative of a liquidity position where liabilities exceeded assets in the short term. Values oscillated between a low near 0.62 and a high around 0.80, with no consistent upward or downward trajectory. Periods of improvement to the upper 0.7 range were interspersed with declines to mid 0.6 levels, suggesting fluctuating liquidity conditions. The ratio generally weakened towards the latest periods, signaling a relative reduction in the company’s ability to cover short-term obligations with available current assets.
Overall, the data reflects a pattern of growth and contraction in current assets and liabilities with liquidity remaining tight but fluctuating. The persistence of a current ratio below 1 requires attention, as it may indicate stress in meeting short-term obligations without reliance on additional financing or asset sales. The recent decrease in both current assets and liabilities in the early 2024 period could signal a strategic balance adjustment or operational changes affecting working capital management.
- Current Assets
- Generally increased from early 2019 to late 2020, then varied with a downward trend starting in 2023.
- Current Liabilities
- Showed an increasing trend from 2019 through 2023, with a notable decrease in early 2024.
- Current Ratio
- Remained below 1.0 throughout, displaying liquidity pressures and variability without sustained improvement.
- Liquidity Insights
- Liquidity conditions fluctuate, with periods of modest improvement overshadowed by overall constraints indicated by the ratio below unity.
Quick Ratio
Kellanova, quick ratio calculation (quarterly data)
| Jun 29, 2024 | Mar 30, 2024 | Dec 30, 2023 | Sep 30, 2023 | Jul 1, 2023 | Apr 1, 2023 | Dec 31, 2022 | Oct 1, 2022 | Jul 2, 2022 | Apr 2, 2022 | Dec 31, 2021 | Oct 2, 2021 | Jul 3, 2021 | Apr 3, 2021 | Dec 31, 2020 | Sep 26, 2020 | Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 272) | 242) | 274) | 1,099) | 308) | 347) | 299) | 373) | 323) | 313) | 286) | 440) | 395) | 391) | 435) | 1,329) | 1,047) | 1,016) | 397) | 453) | 340) | 272) | |||||||
| Marketable securities | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 250) | 200) | —) | —) | —) | —) | —) | |||||||
| Accounts receivable, net | 1,654) | 1,666) | 1,568) | 1,876) | 1,930) | 1,820) | 1,736) | 1,985) | 1,884) | 1,687) | 1,489) | 1,680) | 1,659) | 1,660) | 1,537) | 1,626) | 1,692) | 1,748) | 1,576) | 1,643) | 1,643) | 1,633) | |||||||
| Total quick assets | 1,926) | 1,908) | 1,842) | 2,975) | 2,238) | 2,167) | 2,035) | 2,358) | 2,207) | 2,000) | 1,775) | 2,120) | 2,054) | 2,051) | 1,972) | 3,205) | 2,939) | 2,764) | 1,973) | 2,096) | 1,983) | 1,905) | |||||||
| Current liabilities | 4,774) | 5,525) | 5,060) | 6,524) | 6,476) | 6,001) | 6,349) | 6,033) | 6,051) | 5,848) | 5,315) | 5,029) | 4,946) | 5,385) | 5,238) | 6,034) | 5,856) | 5,595) | 4,778) | 4,389) | 4,989) | 4,978) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Quick ratio1 | 0.40 | 0.35 | 0.36 | 0.46 | 0.35 | 0.36 | 0.32 | 0.39 | 0.36 | 0.34 | 0.33 | 0.42 | 0.42 | 0.38 | 0.38 | 0.53 | 0.50 | 0.49 | 0.41 | 0.48 | 0.40 | 0.38 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | 0.80 | 0.75 | 0.72 | 0.78 | 0.82 | 0.81 | 0.77 | 0.80 | 0.78 | 0.80 | 0.81 | 1.17 | 1.12 | 0.99 | 0.96 | 0.93 | 0.88 | 0.68 | — | — | — | — | |||||||
| Mondelēz International Inc. | 0.20 | 0.21 | 0.29 | 0.27 | 0.25 | 0.29 | 0.30 | 0.35 | 0.32 | 0.35 | 0.42 | 0.43 | 0.30 | 0.32 | 0.39 | 0.41 | 0.25 | 0.27 | — | — | — | — | |||||||
| PepsiCo Inc. | 0.60 | 0.64 | 0.66 | 0.68 | 0.60 | 0.61 | 0.58 | 0.68 | 0.59 | 0.63 | 0.56 | 0.65 | 0.66 | 0.68 | 0.77 | 0.73 | 0.75 | 0.89 | — | — | — | — | |||||||
| Philip Morris International Inc. | 0.44 | 0.41 | 0.28 | 0.36 | 0.37 | 0.31 | 0.29 | 0.48 | 0.47 | 0.44 | 0.44 | 0.49 | 0.59 | 0.53 | 0.56 | 0.55 | 0.52 | 0.43 | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 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).
1 Q2 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 1,926 ÷ 4,774 = 0.40
2 Click competitor name to see calculations.
- Total Quick Assets
-
Total quick assets showed an overall moderate fluctuation across the examined periods. From March 2019 to December 2019, there was a gradual increase, peaking notably in the second quarter of 2020 at 3,205 million US dollars. However, this was followed by a significant decline by the end of 2020 to 1,972 million US dollars. Throughout 2021 and into early 2022, total quick assets remained relatively stable, fluctuating between approximately 1,775 and 2,358 million US dollars. In 2023, the figure exhibited an upward trend, reaching a notable peak of 2,975 million US dollars in September 2023 before decreasing sharply again towards mid-2024, stabilizing around 1,900 to 1,930 million US dollars.
- Current Liabilities
-
Current liabilities demonstrated a general upward trend until the end of 2022, initially increasing from around 4,389 million US dollars in September 2019 to a peak near 6,524 million US dollars in September 2023. Despite some fluctuations, liabilities mostly hovered above 5,000 million US dollars after June 2019. The data for the first half of 2024 shows a noticeable decrease, with liabilities dropping to about 4,774 million US dollars by June 2024.
- Quick Ratio
-
The quick ratio fluctuated across the periods but predominantly remained below 0.5, indicating relatively low liquidity in relation to current liabilities. It started at 0.38 in March 2019 and showed some improvement, reaching a high of 0.53 in September 2020. This peak was followed by a decline to the lowest observed value of 0.32 by December 2022. Minor recoveries occurred intermittently, notably rising back to 0.46 in September 2023, yet it fell again toward the close of the dataset, settling near 0.35 to 0.40 in mid-2024. Overall, the quick ratio suggests persistent pressure on short-term liquidity despite some intermittent gains.
- Summary Insights
-
Analysis of total quick assets alongside current liabilities indicates an increasingly stretched liquidity position over time, with liabilities generally outpacing the growth in quick assets. Despite occasional gains in asset levels, the corresponding rise in liabilities has constrained improvements in the quick ratio, frequently reflecting liquidity challenges. Periods of asset growth were often temporary and followed by notable declines, while liabilities have shown sustained upward movement until early 2024 before receding. The quick ratio’s consistent sub-0.5 readings highlight the ongoing need to manage short-term obligations carefully. Recent data to mid-2024 suggests some improvement in liabilities and marginal enhancement in liquidity metrics, but overall financial stability in terms of quick assets coverage remains cautious.
Cash Ratio
Kellanova, cash ratio calculation (quarterly data)
| Jun 29, 2024 | Mar 30, 2024 | Dec 30, 2023 | Sep 30, 2023 | Jul 1, 2023 | Apr 1, 2023 | Dec 31, 2022 | Oct 1, 2022 | Jul 2, 2022 | Apr 2, 2022 | Dec 31, 2021 | Oct 2, 2021 | Jul 3, 2021 | Apr 3, 2021 | Dec 31, 2020 | Sep 26, 2020 | Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 272) | 242) | 274) | 1,099) | 308) | 347) | 299) | 373) | 323) | 313) | 286) | 440) | 395) | 391) | 435) | 1,329) | 1,047) | 1,016) | 397) | 453) | 340) | 272) | |||||||
| Marketable securities | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 250) | 200) | —) | —) | —) | —) | —) | |||||||
| Total cash assets | 272) | 242) | 274) | 1,099) | 308) | 347) | 299) | 373) | 323) | 313) | 286) | 440) | 395) | 391) | 435) | 1,579) | 1,247) | 1,016) | 397) | 453) | 340) | 272) | |||||||
| Current liabilities | 4,774) | 5,525) | 5,060) | 6,524) | 6,476) | 6,001) | 6,349) | 6,033) | 6,051) | 5,848) | 5,315) | 5,029) | 4,946) | 5,385) | 5,238) | 6,034) | 5,856) | 5,595) | 4,778) | 4,389) | 4,989) | 4,978) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Cash ratio1 | 0.06 | 0.04 | 0.05 | 0.17 | 0.05 | 0.06 | 0.05 | 0.06 | 0.05 | 0.05 | 0.05 | 0.09 | 0.08 | 0.07 | 0.08 | 0.26 | 0.21 | 0.18 | 0.08 | 0.10 | 0.07 | 0.05 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | 0.65 | 0.60 | 0.58 | 0.63 | 0.65 | 0.61 | 0.59 | 0.62 | 0.57 | 0.55 | 0.63 | 0.93 | 0.85 | 0.76 | 0.75 | 0.79 | 0.74 | 0.55 | — | — | — | — | |||||||
| Mondelēz International Inc. | 0.06 | 0.05 | 0.10 | 0.09 | 0.08 | 0.10 | 0.11 | 0.15 | 0.14 | 0.14 | 0.25 | 0.24 | 0.14 | 0.14 | 0.24 | 0.22 | 0.11 | 0.11 | — | — | — | — | |||||||
| PepsiCo Inc. | 0.21 | 0.28 | 0.32 | 0.31 | 0.22 | 0.20 | 0.20 | 0.26 | 0.21 | 0.27 | 0.23 | 0.27 | 0.24 | 0.29 | 0.41 | 0.37 | 0.38 | 0.51 | — | — | — | — | |||||||
| Philip Morris International Inc. | 0.21 | 0.18 | 0.12 | 0.14 | 0.15 | 0.11 | 0.12 | 0.26 | 0.25 | 0.23 | 0.23 | 0.25 | 0.31 | 0.26 | 0.37 | 0.31 | 0.27 | 0.23 | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 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).
1 Q2 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 272 ÷ 4,774 = 0.06
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets demonstrated considerable volatility over the examined period. Starting at US$272 million in March 2019, the value increased steadily, peaking significantly at US$1,579 million in September 2020. Following this peak, a sharp decline occurred by December 2020, decreasing to US$435 million. The subsequent periods experienced further fluctuations, with cash assets generally remaining below the earlier peak, except for a notable rise to US$1,099 million in September 2023. Overall, the trend shows periods of rapid accumulation of cash reserves followed by steep reductions, suggesting variable liquidity management or operational cash flow impacts.
- Current liabilities
- Current liabilities consistently fluctuated within a range of approximately US$4.3 billion to US$6.5 billion across the quarters. Initially, the liabilities were around US$4.9 billion in early 2019, gradually increasing to a peak near US$6.5 billion by the third quarter of 2023. While fluctuations exist, the general pattern indicates a gradual upward trajectory in short-term obligations, with several cyclical decreases. This trend may reflect an expanding operational scale or shifting payment cycles, balanced intermittently by liability reductions.
- Cash ratio
- The cash ratio, representing the ability to cover current liabilities with cash assets, showed significant variability. Initially low at 0.05 in March 2019, it rose to a peak of 0.26 by September 2020, concurrent with the peak in cash assets. Following that period, the ratio declined to levels around 0.05 to 0.09 for several quarters, indicating a reduced liquidity buffer relative to current liabilities. The ratio surged again to 0.17 in September 2023 but then fell back to approximately 0.05 to 0.06 thereafter. The overall pattern reflects that liquidity coverage was generally low with occasional spikes correlating to temporary cash asset increases.
- Summary
- The financial data reveals a pattern of cyclical liquidity fluctuations, with cash asset peaks generally not sustained while current liabilities show a gradual increase over time. The cash ratio remained modest for much of the period, indicating limited cash coverage of liabilities despite intermittent improvements. These trends suggest that cash management and liability control have been dynamic, possibly reflecting reactive adjustments to operational demands or strategic shifts in working capital policies. Monitoring the sustainability of cash levels relative to growing liabilities would be advisable.