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).
- Current Ratio
- The current ratio demonstrates some volatility across the observed periods, generally fluctuating between 0.62 and 0.79. Initially, it remained somewhat stable around 0.77 to 0.79 during early 2020 but declined to a low of 0.64 by the end of 2021. Thereafter, it showed intermittent increases and decreases, reaching a value of 0.73 in mid-2024. Despite short-term fluctuations, there is no clear sustained upward or downward trend, indicating relatively consistent but generally low liquidity relative to current liabilities.
- Quick Ratio
- The quick ratio also exhibits variability, ranging primarily between 0.32 and 0.53. Early 2020 values started at about 0.49 to 0.53 but declined significantly to around 0.33 by late 2021. The ratio experienced minor recoveries and dips through 2022 and 2023, with a notable increase to 0.46 in late 2023 before settling to 0.40 by mid-2024. Overall, the quick ratio trends suggest constraints in the company’s ability to meet short-term obligations without relying on inventory, reflecting cautious liquidity management.
- Cash Ratio
- The cash ratio is consistently the lowest liquidity metric and exhibits marked volatility. Starting from 0.18 to 0.26 in early 2020, it sharply dropped to lows near 0.05 during several periods between late 2020 and 2023, indicating minimal cash and cash equivalents relative to current liabilities. There were brief spikes, notably in late 2023 when it temporarily rose to 0.17. However, these increases were not sustained, with the ratio returning to around 0.06 by mid-2024. This pattern highlights limited immediate cash availability, potentially posing challenges for urgent liquidity needs.
- Overall Liquidity Analysis
- The company's liquidity ratios collectively point to a relatively constrained short-term financial position. The current ratio remains below the commonly preferred benchmark of 1, indicating current liabilities exceed current assets. The quick and cash ratios further emphasize limited liquid assets available to cover short-term obligations without relying on inventory sales. The variability across quarters may reflect operational seasonality, working capital adjustments, or external financial pressures. Sustained attention to improving liquidity buffers would be prudent to enhance financial stability.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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) | ||||||
| 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) | ||||||
| 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 | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
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).
1 Q2 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 3,470 ÷ 4,774 = 0.73
2 Click competitor name to see calculations.
- Current Assets
- The current assets showed moderate fluctuation over the observed periods. Initially, there was a gradual increase from approximately 4,290 million USD to about 4,753 million USD in late 2020. This was followed by a notable decline to 3,394 million USD by the end of 2021. Subsequently, current assets rose again, peaking near 4,986 million USD in the third quarter of 2023 before decreasing sharply to around 3,330 million USD by the first quarter of 2024. The latest figures show a slight recovery but overall remain lower compared to previous peaks.
- Current Liabilities
- Current liabilities consistently exceeded current assets throughout the periods analyzed. The liabilities demonstrated an overall upward trend from 5,595 million USD in early 2020 to a peak of approximately 6,524 million USD in the third quarter of 2023. A subsequent reduction is observed toward mid-2024, falling to 4,774 million USD. However, interim fluctuations suggest a pattern of volatility in short-term obligations.
- Current Ratio
- The current ratio remained below 1 for all periods, indicating persistent short-term liquidity pressures. The ratio hovered between 0.62 and 0.79, reflecting the continual excess of current liabilities over current assets. Notably, the ratio exhibited a declining trend in late 2020 and end of 2021, reaching lows near 0.62, which signals more constrained liquidity positions during those quarters. Temporary improvements are observed, such as increases to around 0.76, but these were not sustained consistently. The most recent periods show continued volatility with no definitive trend toward strengthened short-term liquidity.
- Summary
- Overall, the data depicts a company facing challenges in maintaining adequate short-term liquidity, as evidenced by a current ratio consistently below 1. Current assets show cyclical fluctuations without sustained growth, while current liabilities tend to increase overall, intensifying liquidity stress. The periodic recoveries in current assets and the current ratio suggest occasional improvements, yet these are offset by periods of decline. The latest figures indicate some stabilization, but the liquidity position remains relatively weak and warrants attention to ensure timely fulfillment of short-term obligations.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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) | ||||||
| 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) | ||||||
| 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) | ||||||
| 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) | ||||||
| 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 | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
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).
1 Q2 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 1,926 ÷ 4,774 = 0.40
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's liquidity position over the examined periods.
- Total Quick Assets
- The total quick assets, measured in millions of US dollars, exhibit fluctuations throughout the timeline. Initially, there is a rising trend from around 2,764 million to a peak near 3,205 million by the third quarter of 2020. This is followed by a decline reaching approximately 1,775 million by the end of 2021. Subsequently, quick assets show a moderate recovery, rising again towards 2,975 million by the third quarter of 2023 before dropping sharply to under 2,000 million in the first half of 2024. This pattern suggests periods of both accumulation and depletion of liquid assets, indicating variable liquidity strategies or operational conditions affecting asset availability.
- Current Liabilities
- Current liabilities demonstrate a generally increasing trend over time, starting from about 5,595 million in the first quarter of 2020 and reaching peaks near 6,524 million in late 2023. Nevertheless, there is a marked reduction in the first half of 2024 to approximately 4,774 million. This indicates a buildup in short-term obligations over the first years considered, potentially implying greater reliance on current financing or operational payables, followed by a notable effort to reduce these liabilities in the most recent quarters.
- Quick Ratio
- The quick ratio, which measures liquid asset coverage over current liabilities, consistently remains below 1 throughout all periods, highlighting a liquidity constraint. The ratio begins near 0.49, experiences a decline reaching lows around 0.32 to 0.33 towards late 2021 and early 2022, signaling reduced short-term solvency. There is a slight improvement to 0.46 in the third quarter of 2023, coinciding with the peak in quick assets, but this is followed by a dip to about 0.35 to 0.4 in subsequent quarters. The persistent low values of the quick ratio indicate ongoing pressure on the company's ability to cover current liabilities with the most liquid assets.
In summary, the company's liquidity profile over the period analyzed shows volatility in quick assets with intermittent increases and decreases, a general increase and later reduction in current liabilities, and a consistently low quick ratio indicating tight short-term liquidity. These patterns imply that the company may have faced challenges in maintaining optimal liquidity levels, necessitating active management of both asset holdings and current obligations.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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) | ||||||
| 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) | ||||||
| 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) | ||||||
| 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 | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
| 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 | — | — | — | — | ||||||
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).
1 Q2 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 272 ÷ 4,774 = 0.06
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the examined quarters. There is a pronounced fluctuation in total cash assets, with a peak early in the period followed by a substantial drop amid the 2020-2021 timeframe. After a generally lower level through 2022 and early 2023, a remarkable surge is observed in the quarter ending September 30, 2023, before declining again in subsequent quarters. This pattern indicates volatility in liquidity holdings, possibly linked to operational needs or strategic cash management.
Current liabilities consistently remain at a high level throughout the periods, showing moderate fluctuations but no clear long-term upward or downward trend. This steadiness in liabilities, juxtaposed with variable cash assets, has implications for liquidity risk and working capital management effectiveness.
The cash ratio, which measures the company's ability to cover current liabilities with cash assets, mirrors the trend in cash reserves. It starts at a relatively low level, drops further during late 2020 and early 2021, indicating tighter short-term liquidity. The ratio stabilizes at a low range through 2022 and early 2023 before experiencing a temporary increase in the quarter ending September 30, 2023, reflecting the spike in cash assets during that quarter. Subsequent declines indicate that despite occasional improvements, liquidity coverage remains generally constrained relative to current liabilities.
- Liquidity Position
- The company exhibits variability in cash asset levels, with a notable peak in late 2023 followed by decline, suggesting episodic cash accumulation rather than steady growth.
- Current Liabilities
- Maintained high but relatively stable, indicating persistent short-term obligations that require ongoing attention.
- Cash Ratio Analysis
- Consistently low cash ratios highlight limited cash liquidity coverage over liabilities, which could pose risk under stress scenarios.