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Darden Restaurants Inc  (NYSE:DRI) Cash, Cash Equivalents, Marketable Securities: $233 Mil (As of May. 2017)

Darden Restaurants Inc's quarterly cash, cash equivalents, marketable securities increased from Nov. 2016 ($116.80 Mil) to Feb. 2017 ($391.40 Mil) but then stayed the same from Feb. 2017 ($391.40 Mil) to May. 2017 ($233.10 Mil).

Darden Restaurants Inc's annual cash, cash equivalents, marketable securities declined from May. 2015 ($535.90 Mil) to May. 2016 ($274.80 Mil) and declined from May. 2016 ($274.80 Mil) to May. 2017 ($233.10 Mil).


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Darden Restaurants Inc Annual Data

May08 May09 May10 May11 May12 May13 May14 May15 May16 May17
Cash, Cash Equivalents, Marketable Securities Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 88.20 98.30 535.90 274.80 233.10

Darden Restaurants Inc Quarterly Data

Aug12 Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17
Cash, Cash Equivalents, Marketable Securities Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 274.80 114.70 116.80 391.40 233.10

Calculation

Cash and cash equivalents are the most liquid assets on the balance sheet. Cash equivalents are assets that are readily convertible into cash, such as money market holdings, short-term government bonds or Treasury bills, marketable securities and commercial paper.

Marketable Securities are very liquid securities that can be converted into cash quickly at a reasonable price.


Explanation

Marketable securities are very liquid as they tend to have maturities of less than one year. Furthermore, the rate at which these securities can be bought or sold has little effect on their prices.

A high number means either:

1) The company has competitive advantage generating lots of cash

2) Just sold a business or bonds (not necessarily good)

A low stockpile of cash usually means poor to mediocre economics.

There are 3 ways to create large cash reserve.

1) Sell new bonds or equity to public

2) Sell business or asset

3) It has an ongoing business generating more cash than it burns (usually means durable competitive advantage)

When a company is suffering a short term problem, Buffett looks at cash or marketable securities to see whether it has the financial strength to ride it out.

Important: Lots of cash and marketable securities + little debt = good chance that the business will sail on through tough times.

Test to see what is creating cash by looking at past 7 yrs of balance sheets. This will reveal how the cash was created.


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