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. Sanderson Farms's quick ratio for the quarter that ended in Apr. 2022 was 4.02.
Sanderson Farms has a quick ratio of 4.02. It generally indicates good short-term financial strength.
The historical rank and industry rank for Sanderson Farms's Quick Ratio or its related term are showing as below:
SAFM's Quick Ratio is not ranked *
in the Consumer Packaged Goods industry.
Industry Median: 1.03 * Ranked among companies with meaningful Quick Ratio only.
Sanderson Farms Quick Ratio Historical Data
The historical data trend for Sanderson Farms'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.
Competitive Comparison of Sanderson Farms's Quick Ratio
For the Packaged Foods subindustry, Sanderson Farms'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.
Sanderson Farms's Quick Ratio Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Sanderson Farms's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Sanderson Farms's Quick Ratio falls into.
Sanderson Farms 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.
Sanderson Farms's Quick Ratio for the fiscal year that ended in Oct. 2021 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.
Sanderson Farms (NAS:SAFM) 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.
Sanderson Farms Quick Ratio Related Terms
Thank you for viewing the detailed overview of Sanderson Farms's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Sanderson Farms (Sanderson Farms) Business Description
Sanderson Farms Inc is a dressed-chicken processor in the United States, producing and selling a variety of fresh, frozen, and value-added chicken products to grocers, food-service operators, and distributors. Most revenue is generated in the Southeastern, Southwestern, Northeastern, and Western United States. The company's product portfolio consists of tray packs and large birds, catering to grocery and food-service customers. It sells chill-packed, ice-packed, bulk-packed, and frozen chicken in whole, cut-up, and boneless form under the brand name Sanderson Farms to retailers, distributors, and casual dining operators in the United States.
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