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Whole Earth Brands (NAS:FREEW) 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.
Whole Earth Brands Quick Ratio Related Terms
Whole Earth Brands Quick Ratio Historical Data
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The historical data trend for Whole Earth Brands'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, Whole Earth Brands'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.
Whole Earth Brands Quick Ratio vs Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Whole Earth Brands's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Whole Earth Brands's Quick Ratio falls into.
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.
Whole Earth Brands's Quick Ratio for the fiscal year that ended in Dec. 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.
Whole Earth Brands (FREEW) has a Quick Ratio of 1.36 as of Jun. 2024. Quick ratio is the ratio of current assets less inventory to current liabilities. View historical data on Whole Earth Brands and its competitors. This is 20% above median its historical median of 1.13. Over the past decade, Whole Earth Brands' Quick Ratio has ranged from 0.22 to 97.07.
Is Whole Earth Brands' Quick Ratio too high?
Whole Earth Brands' current Quick Ratio of 1.36 is 20% above median its 10-year median of 1.13. Over the past 10 years, this metric has ranged from a low of 0.22 to a high of 97.07. The Consumer Packaged Goods industry median Quick Ratio is 1.06. Whole Earth Brands' value of 1.36 is 28.3% above this industry median. Overall, Whole Earth Brands has a GF Score™ of 12/100, reflecting its overall financial health beyond just this single metric.
How does Whole Earth Brands' Quick Ratio compare to MAMA and LWAY?
Whole Earth Brands' Quick Ratio of 1.36 can be compared against companies in the Consumer Packaged Goods industry. The industry median Quick Ratio is 1.06. Whole Earth Brands' value of 1.36 is 28.3% above this benchmark. Historically, Whole Earth Brands' own Quick Ratio has ranged from 0.22 to 97.07 over the past decade. While the company's 10-year median is 1.13 vs. the industry median of 1.06, Whole Earth Brands has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Quick Ratio for a Consumer Packaged Goods company?
The median Quick Ratio among Consumer Packaged Goods companies is 1.06, based on 2,006 companies in the industry. Companies in the top quartile (top 25%) have a Quick Ratio significantly above this median, while those in the bottom quartile fall well below. However, Quick Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Whole Earth Brands's current Quick Ratio of 1.36 is 28.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Quick Ratio mean?
A high Quick Ratio can signal that a stock is expensive relative to its fundamentals. Quick ratio is the ratio of current assets less inventory to current liabilities. View historical data on Whole Earth Brands and its competitors. For the Consumer Packaged Goods industry, the median Quick Ratio is 1.06 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Whole Earth Brands's current Quick Ratio is 1.36, which is 20% above median its own 10-year median of 1.13. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Whole Earth Brands stock overvalued right now?
Whole Earth Brands (FREEW) has a current Quick Ratio of 1.36. The current Quick Ratio is 1.36, which is 20% above median its 10-year median of 1.13 and 28.3% above the Consumer Packaged Goods industry median of 1.06. Whole Earth Brands' overall GF Score™ is 12/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Quick Ratio calculated?
Quick Ratio is calculated from a company's financial statements. For Whole Earth Brands (FREEW), the current Quick Ratio is 1.36 as of Jun. 2024. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Whole Earth Brands Inc is a food company that provides access to high-quality, plant-based sweeteners, flavor enhancers and other foods through diverse portfolio of brands and products. The company operates in two segments namely, Branded CPG and Flavors & Ingredients. Its portfolio consists of three main product groups: sweeteners, adjacencies, and ingredients. Majority of the revenue is generated from the Branded CPG segment which provides a variety of sweetener formulations under brands such as Whole Earth, Pure Via, Wholesome, Swerve, Canderel, and Equal. Geographically, the company derives key revenue from North America and rest from Europe, Latin America, India, Middle East and Africa and other markets.
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