Current Ratio
since 2005
Calculation
Reynolds American Inc., current ratio, long-term trends, calculation
| Current ratio | = | Current assets1 | ÷ | Current liabilities1 | |
|---|---|---|---|---|---|
| Dec 31, 2016 | 0.85 | = | 4,238) | ÷ | 4,985) |
| Dec 31, 2015 | 1.17 | = | 6,187) | ÷ | 5,291) |
| Dec 31, 2014 | 0.94 | = | 3,323) | ÷ | 3,544) |
| Dec 31, 2013 | 1.19 | = | 3,655) | ÷ | 3,076) |
| Dec 31, 2012 | 1.28 | = | 4,812) | ÷ | 3,769) |
| Dec 31, 2011 | 1.01 | = | 4,307) | ÷ | 4,276) |
| Dec 31, 2010 | 1.10 | = | 4,802) | ÷ | 4,372) |
| Dec 31, 2009 | 1.27 | = | 5,495) | ÷ | 4,340) |
| Dec 31, 2008 | 1.28 | = | 5,019) | ÷ | 3,923) |
| Dec 31, 2007 | 1.28 | = | 4,992) | ÷ | 3,903) |
| Dec 31, 2006 | 1.21 | = | 4,935) | ÷ | 4,092) |
| Dec 31, 2005 | 1.22 | = | 5,065) | ÷ | 4,149) |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in millions
The liquidity profile from 2005 to 2016 is characterized by an initial period of relative stability followed by increasing volatility and a general decline in the ability to cover short-term obligations with short-term assets.
- Initial Stability Phase (2005–2009)
- Between 2005 and 2009, the current ratio remained consistently strong, fluctuating within a narrow band between 1.21 and 1.28. During this window, current assets were maintained at levels comfortably exceeding current liabilities, indicating a stable liquidity cushion.
- Intermediate Volatility and Threshold Breaches (2010–2014)
- A period of instability began in 2010, with the current ratio declining to 1.10 and further dropping to 1.01 in 2011. Although a recovery to 1.28 was achieved in 2012, a subsequent downward trend led the ratio to fall below the critical 1.0 threshold in 2014, reaching 0.94. This breach signifies a point where current liabilities exceeded current assets.
- Late-Period Fluctuations (2015–2016)
- In 2015, a significant expansion in the balance sheet occurred, with current assets peaking at 6,187 million US$ and current liabilities rising to 5,291 million US$, which temporarily restored the current ratio to 1.17. However, this recovery was short-lived; by 2016, the ratio fell to 0.85, the lowest level recorded in the analyzed period. This final decline resulted from a reduction in current assets to 4,238 million US$ coupled with a further increase in current liabilities to 4,985 million US$.
The long-term trend reflects a transition from a position of consistent liquidity surplus to a more constrained financial position. The repeated dips below 1.0 in the latter years suggest a strategic or operational shift that increased reliance on short-term financing or a reduction in liquid asset holdings relative to maturing obligations.
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Comparison to Competitors
Reynolds American Inc., current ratio, long-term trends, comparison to competitors
| Reynolds American Inc. | Coca-Cola Co. | Mondelēz International Inc. | PepsiCo Inc. | Philip Morris International Inc. | |
|---|---|---|---|---|---|
| Dec 31, 2016 | 0.85 | 1.28 | 0.59 | 1.28 | 1.07 |
| Dec 31, 2015 | 1.17 | 1.24 | 0.82 | 1.31 | 1.03 |
| Dec 31, 2014 | 0.94 | 1.02 | 0.84 | 1.14 | 1.02 |
| Dec 31, 2013 | 1.19 | 1.13 | 0.92 | 1.24 | 0.99 |
| Dec 31, 2012 | 1.28 | 1.09 | 1.05 | 1.10 | 0.97 |
| Dec 31, 2011 | 1.01 | 1.05 | 0.88 | 0.96 | 1.00 |
| Dec 31, 2010 | 1.10 | 1.17 | 1.04 | 1.11 | 1.07 |
| Dec 31, 2009 | 1.27 | 1.28 | 1.08 | 1.44 | 1.31 |
| Dec 31, 2008 | 1.28 | 0.94 | 1.03 | 1.23 | 1.47 |
| Dec 31, 2007 | 1.28 | 0.92 | 0.63 | 1.31 | — |
| Dec 31, 2006 | 1.21 | 0.95 | 0.79 | 1.33 | — |
| Dec 31, 2005 | 1.22 | 1.04 | 0.93 | 1.11 | — |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Food, Beverage & Tobacco)
Reynolds American Inc., current ratio, long-term trends, comparison to sector (food, beverage & tobacco)
| Reynolds American Inc. | Food, Beverage & Tobacco | |
|---|---|---|
| Dec 31, 2016 | 0.85 | 1.11 |
| Dec 31, 2015 | 1.17 | 1.15 |
| Dec 31, 2014 | 0.94 | 1.02 |
| Dec 31, 2013 | 1.19 | 1.08 |
| Dec 31, 2012 | 1.28 | 1.06 |
| Dec 31, 2011 | 1.01 | 0.98 |
| Dec 31, 2010 | 1.10 | 1.10 |
| Dec 31, 2009 | 1.27 | 1.27 |
| Dec 31, 2008 | 1.28 | 1.15 |
| Dec 31, 2007 | 1.28 | 0.87 |
| Dec 31, 2006 | 1.21 | 0.98 |
| Dec 31, 2005 | 1.22 | 1.03 |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Consumer Staples)
Reynolds American Inc., current ratio, long-term trends, comparison to industry (consumer staples)
| Reynolds American Inc. | Consumer Staples | |
|---|---|---|
| Dec 31, 2016 | 0.85 | 1.04 |
| Dec 31, 2015 | 1.17 | 1.06 |
| Dec 31, 2014 | 0.94 | 0.97 |
| Dec 31, 2013 | 1.19 | 0.97 |
| Dec 31, 2012 | 1.28 | 0.99 |
| Dec 31, 2011 | 1.01 | 0.97 |
| Dec 31, 2010 | 1.10 | 1.01 |
| Dec 31, 2009 | 1.27 | 1.03 |
| Dec 31, 2008 | 1.28 | 0.98 |
| Dec 31, 2007 | 1.28 | 0.91 |
| Dec 31, 2006 | 1.21 | 1.04 |
| Dec 31, 2005 | 1.22 | 0.99 |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).