The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated as a company's Total Current Assets excludes Total Inventories divides by its Total Current Liabilities. Hormel Foods's quick ratio for the quarter that ended in Jan. 2024 was 0.79.
Hormel Foods has a quick ratio of 0.79. It indicates that the company cannot currently fully pay back its current liabilities.
The historical rank and industry rank for Hormel Foods's Quick Ratio or its related term are showing as below:
HRL'
s Quick Ratio Range Over the Past 10 Years
Min: 0.65 Med: 1.11 Max: 1.94
Current: 0.79
During the past 13 years, Hormel Foods's highest Quick Ratio was 1.94. The lowest was 0.65. And the median was 1.11.
HRL's Quick Ratio is ranked worse than 62.37% of 1908
companies
in the Consumer Packaged Goods industry
Industry Median: 1.03
vs HRL: 0.79
Hormel Foods Quick Ratio Historical Data
The historical data trend for Hormel Foods's Quick Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Packaged Foods subindustry, Hormel Foods's Quick Ratio, along with its competitors' market caps and Quick Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Hormel Foods Quick Ratio Distribution
For the Consumer Packaged Goods industry and Consumer Defensive sector, Hormel Foods's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Hormel Foods's Quick Ratio falls into.
Hormel Foods Quick Ratio Calculation
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets.
Hormel Foods's Quick Ratio for the fiscal year that ended in Oct. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hormel Foods (NYSE:HRL) Quick Ratio Explanation
The quick ratio is more conservative than the Current Ratio because it excludes inventories from current assets. The ratio derives its name presumably from the fact that assets such as cash and marketable securities are quick sources of cash. Inventories generally take time to be converted into cash, and if they have to be sold quickly, the company may have to accept a lower price than book value of these inventories. As a result, they are justifiably excluded from assets that are ready sources of immediate cash.
In general, low or decreasing quick ratios generally suggest that a company is over-leveraged, struggling to maintain or grow sales, paying bills too quickly or collecting receivables too slowly. On the other hand, a high or increasing quick ratio generally indicates that a company is experiencing solid top-line growth, quickly converting receivables into cash, and easily able to cover its financial obligations. Such companies often have faster inventory turnover and cash conversion cycles.
The higher the quick ratio, the better the company's liquidity position.
Hormel Foods Quick Ratio Related Terms
Thank you for viewing the detailed overview of Hormel Foods's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Historically meat-focused, Hormel Foods broadened its lineup to include other protein offerings and become a branded food company. The firm sells its wares through multiple channels, including U.S. retail (64% of fiscal 2023 sales), U.S. food service (30%), and international (6%). By product, 53% of fiscal 2022 sales were from perishable food, 27% from shelf-stable, 17% from poultry, and 3% from other products. Major brands include Hormel, Spam, Jennie-O, Columbus, Applegate, Planters, and Skippy. Many of these hold the number one or two market share in their respective categories.
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