Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Sysco Corp., liquidity ratios
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
- Current Ratio
- The current ratio exhibited variability over the analyzed periods. Initially, it increased from 1.33 in mid-2019 to a peak of 1.84 in mid-2020. Subsequently, the ratio declined to 1.47 in mid-2021 and further decreased, stabilizing around 1.2 by mid-2024. This pattern suggests an initial improvement in liquidity followed by a gradual reduction, approaching a more conservative liquidity stance.
- Quick Ratio
- The quick ratio followed a similar fluctuating trend. It rose notably from 0.77 in 2019 to 1.33 in 2020, indicating a stronger immediate liquidity position without relying on inventory. Afterward, it decreased steadily, reaching 0.65 by mid-2022 and maintaining that level through mid-2024. This decline signals a reduction in liquid assets excluding inventory over the latter periods.
- Cash Ratio
- The cash ratio experienced significant changes, increasing sharply from a very low 0.08 in 2019 to 0.90 in 2020, which reflects a substantial boost in available cash and cash equivalents. However, this ratio diminished considerably in subsequent years, falling to 0.41 in mid-2021 and then further declining to near its initial level around 0.08 by mid-2024. Such a pattern indicates a temporary accumulation of cash resources in 2020, followed by a return to lower cash reserves in the following years.
Current Ratio
Sysco Corp., current ratio calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | 11,043) | 10,608) | 10,483) | 10,734) | 12,348) | 8,142) | |
| Current liabilities | 9,241) | 8,540) | 8,750) | 7,320) | 6,718) | 6,103) | |
| Liquidity Ratio | |||||||
| Current ratio1 | 1.20 | 1.24 | 1.20 | 1.47 | 1.84 | 1.33 | |
| Benchmarks | |||||||
| Current Ratio, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.97 | 1.07 | 1.02 | 1.00 | 1.13 | 1.01 | |
| Target Corp. | 0.91 | 0.92 | 0.99 | 1.03 | 0.89 | — | |
| Walmart Inc. | 0.83 | 0.82 | 0.93 | 0.97 | 0.79 | — | |
| Current Ratio, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.87 | 0.89 | 0.96 | 0.99 | 0.88 | — | |
| Current Ratio, Industry | |||||||
| Consumer Staples | 0.85 | 0.84 | 0.87 | 0.93 | 0.92 | — | |
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 11,043 ÷ 9,241 = 1.20
2 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends related to current assets, current liabilities, and the current ratio over the six-year period.
- Current Assets
- Current assets increased significantly from US$ 8,142 million in mid-2019 to a peak of US$ 12,348 million in mid-2020. Subsequently, there was a gradual decline in current assets over the next three years, reaching US$ 10,483 million by mid-2022. The figures stabilized afterwards, with slight increases to US$ 10,608 million in mid-2023 and US$ 11,043 million in mid-2024.
- Current Liabilities
- Current liabilities exhibited a consistent upward trend throughout the period. Starting at US$ 6,103 million in mid-2019, liabilities rose each year, reaching US$ 9,241 million by mid-2024. The growth was more pronounced after mid-2020, showing a considerable increase especially between mid-2021 and mid-2022.
- Current Ratio
- The current ratio, which measures liquidity by comparing current assets to current liabilities, peaked at 1.84 in mid-2020, reflecting an improved liquidity position during that period. However, the ratio has steadily declined since then, falling to 1.2 by mid-2022 and maintaining a relatively stable but lower level around 1.2 through mid-2024. This indicates a reduction in the cushion of current assets over current liabilities, suggesting a tightening liquidity position over the recent years.
In summary, while current assets recovered somewhat after a decline from their 2020 peak, current liabilities have grown continuously, leading to a gradual compression of the current ratio. This trend points to increasing short-term obligations outpacing growth in short-term assets, which may warrant attention regarding liquidity management going forward.
Quick Ratio
Sysco Corp., quick ratio calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 696) | 745) | 867) | 3,007) | 6,059) | 513) | |
| Accounts receivable, less allowances | 5,324) | 5,092) | 4,839) | 3,782) | 2,894) | 4,182) | |
| Total quick assets | 6,020) | 5,837) | 5,706) | 6,789) | 8,953) | 4,695) | |
| Current liabilities | 9,241) | 8,540) | 8,750) | 7,320) | 6,718) | 6,103) | |
| Liquidity Ratio | |||||||
| Quick ratio1 | 0.65 | 0.68 | 0.65 | 0.93 | 1.33 | 0.77 | |
| Benchmarks | |||||||
| Quick Ratio, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.39 | 0.52 | 0.42 | 0.47 | 0.60 | 0.47 | |
| Target Corp. | 0.27 | 0.20 | 0.33 | 0.48 | 0.24 | — | |
| Walmart Inc. | 0.20 | 0.18 | 0.26 | 0.26 | 0.20 | — | |
| Quick Ratio, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.26 | 0.26 | 0.31 | 0.34 | 0.29 | — | |
| Quick Ratio, Industry | |||||||
| Consumer Staples | 0.38 | 0.37 | 0.38 | 0.43 | 0.47 | — | |
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 6,020 ÷ 9,241 = 0.65
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets increased substantially from 2019 to 2020, rising from approximately $4.7 billion to $8.9 billion. However, after this peak in 2020, there was a decline to about $5.7 billion by 2022. The value stabilized with slight growth in the subsequent years, reaching around $6.0 billion in 2024.
- Current Liabilities
- Current liabilities exhibited a consistent upward trend over the entire period. Starting at approximately $6.1 billion in 2019, they increased steadily each year, reaching about $9.2 billion by 2024. This growth indicates increasing short-term obligations over the years.
- Quick Ratio
- The quick ratio showed considerable fluctuation during the timeframe. It improved significantly from 0.77 in 2019 to a peak of 1.33 in 2020, indicating better liquidity during that year. Following this peak, the ratio declined steadily to 0.65 by 2022 and remained nearly constant through 2024. The sustained low ratio in recent years suggests tighter liquidity relative to current liabilities.
Cash Ratio
Sysco Corp., cash ratio calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 696) | 745) | 867) | 3,007) | 6,059) | 513) | |
| Total cash assets | 696) | 745) | 867) | 3,007) | 6,059) | 513) | |
| Current liabilities | 9,241) | 8,540) | 8,750) | 7,320) | 6,718) | 6,103) | |
| Liquidity Ratio | |||||||
| Cash ratio1 | 0.08 | 0.09 | 0.10 | 0.41 | 0.90 | 0.08 | |
| Benchmarks | |||||||
| Cash Ratio, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.31 | 0.45 | 0.35 | 0.41 | 0.54 | 0.41 | |
| Target Corp. | 0.20 | 0.11 | 0.27 | 0.42 | 0.18 | — | |
| Walmart Inc. | 0.11 | 0.09 | 0.17 | 0.19 | 0.12 | — | |
| Cash Ratio, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.17 | 0.18 | 0.22 | 0.27 | 0.22 | — | |
| Cash Ratio, Industry | |||||||
| Consumer Staples | 0.23 | 0.22 | 0.23 | 0.30 | 0.33 | — | |
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 696 ÷ 9,241 = 0.08
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the six-year period under review. Cash assets experienced a significant increase from 2019 to 2020, rising sharply from $513 million to $6,059 million. However, in subsequent years, these assets declined substantially, reaching $696 million by 2024, which is comparable to the initial level in 2019.
Current liabilities showed a consistent upward trend across the entire timeframe. The liabilities grew from $6,103 million in 2019 to $9,241 million in 2024, indicating an increasing obligation that the company has to meet in the short term. This steady rise suggests that the company's short-term financial commitments have expanded over time.
The cash ratio, a measure of liquidity calculated as cash assets divided by current liabilities, mirrors the fluctuations observed in cash assets relative to the rise in liabilities. The ratio surged dramatically in 2020 to 0.9, reflecting a strong liquidity position that year. However, it decreased sharply in the years following, stabilizing around 0.08 to 0.1 from 2022 onwards. This decline indicates a diminishing capacity to cover current liabilities with cash on hand, potentially pointing to tighter liquidity conditions in recent years.
- Total Cash Assets
- Started low in 2019, peaked sharply in 2020, then steadily declined through 2024 to near the initial level.
- Current Liabilities
- Exhibited a steady and continuous increase from 2019 to 2024.
- Cash Ratio
- Peaked in 2020, reflecting strong liquidity, but fell significantly afterward and remained low, indicating reduced liquidity relative to liabilities.