The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Mead Johnson Nutrition Co's current ratio for the quarter that ended in Mar. 2017 was 2.15.
Mead Johnson Nutrition Co has a current ratio of 2.15. It generally indicates good short-term financial strength.
The historical rank and industry rank for Mead Johnson Nutrition Co's Current Ratio or its related term are showing as below:
FRA:0MJA's Current Ratio is not ranked *
in the Consumer Packaged Goods industry.
Industry Median: 1.665 * Ranked among companies with meaningful Current Ratio only.
Mead Johnson Nutrition Co Current Ratio Historical Data
* 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.
Competitive Comparison of Mead Johnson Nutrition Co's Current Ratio
For the Packaged Foods subindustry, Mead Johnson Nutrition Co's Current Ratio, along with its competitors' market caps and Current 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.
Mead Johnson Nutrition Co's Current Ratio Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Mead Johnson Nutrition Co's Current Ratio distribution charts can be found below:
* The bar in red indicates where Mead Johnson Nutrition Co's Current Ratio falls into.
Mead Johnson Nutrition Co Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Mead Johnson Nutrition Co's Current Ratio for the fiscal year that ended in Dec. 2016 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.
Mead Johnson Nutrition Co (FRA:0MJA) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Mead Johnson Nutrition Co Current Ratio Related Terms
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Mead Johnson Nutrition Co (FRA:0MJA) Business Description
Mead Johnson Nutrition makes, distributes, and markets pediatric nutrition products worldwide under a variety of brands, including Enfamil, its largest label, along with Sustagen, Enfagrow, and Nutramigen. Infant formula represented 59% of 2015 sales and children's nutrition 39%, with expectant and nursing mother nutrition and pediatric vitamins comprising the remainder. The company sells its products globally; 73% of sales were generated outside the United States in 2015. At about 30% of revenue, China is the company's largest market.
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