YUM! Brands Inc. (NYSE:YUM)

The data reveals several key trends in liquidity and short-term financial health over the observed periods.

Current assets

Current assets experienced significant fluctuations throughout the years. Starting at 837 million US dollars in 2005, the figure rose notably to a peak of 2,321 million in 2011. After this peak, current assets steadily declined, reaching 1,688 million by the end of 2015. This pattern indicates an initial phase of asset accumulation followed by a phase of asset reduction or stabilization at a lower level.

Current liabilities

Current liabilities showed a general upward trend over the same period. Beginning at 1,605 million US dollars in 2005, liabilities increased with minor variability, ending at 3,088 million in 2015. This steady rise reflects growing short-term obligations, which may indicate increased operational costs or higher short-term financing needs.

Current ratio

The current ratio, which measures the company's ability to meet short-term liabilities with short-term assets, remained below 1.0 across all years, signaling persistent liquidity constraints. The ratio started at 0.52 in 2005, improved to a peak of 0.95 in 2011, corresponding with the peak in current assets, suggesting better liquidity during that period. However, post-2011, the ratio declined steadily, reaching a low of 0.55 in 2015, indicating a deterioration in short-term financial stability.

In summary, despite growth in current assets until 2011, the concurrent and more rapid increase in current liabilities has led to a consistent shortfall in liquidity, as demonstrated by the current ratio remaining below 1 throughout the timeframe. The peak liquidity in 2011 was not sustained, with a marked decline in the subsequent years, which could pose challenges for meeting short-term obligations without additional funding or asset restructuring.