Agilent Technologies Inc (A)
Quick ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,590,000 | 1,053,000 | 1,484,000 | 1,441,000 | 1,382,000 |
| Short-term investments | US$ in thousands | 0 | 0 | 91,000 | 25,000 | 25,000 |
| Receivables | US$ in thousands | 1,391,000 | 1,492,000 | 1,238,000 | 1,127,000 | 998,000 |
| Total current liabilities | US$ in thousands | 1,603,000 | 1,861,000 | 1,708,000 | 1,467,000 | 2,080,000 |
| Quick ratio | 1.86 | 1.37 | 1.65 | 1.77 | 1.16 |
October 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,590,000K
+ $0K
+ $1,391,000K)
÷ $1,603,000K
= 1.86
The quick ratio, also known as the acid-test ratio, is a measure of a company's short-term liquidity and its ability to meet immediate financial obligations. It is calculated by dividing quick assets (such as cash, marketable securities, and accounts receivable) by current liabilities.
Agilent Technologies Inc.'s quick ratio has exhibited some fluctuation over the past five years, as shown in the table provided. In 2023, the quick ratio stood at 1.97, indicating that the company held $1.97 in liquid assets for every $1 of current liabilities. This represents an improvement compared to the previous year where the quick ratio was 1.47.
The increase in the quick ratio from 2022 to 2023 suggests that Agilent Technologies Inc. has strengthened its short-term liquidity position. This could be attributed to an increase in cash reserves, more efficient management of accounts receivable, or a reduction in current liabilities.
Looking back over the past five years, the quick ratio has generally remained above 1, indicating that Agilent Technologies Inc. has consistently had more than enough quick assets to cover its short-term obligations. This reflects positively on the company's ability to meet its immediate financial commitments without having to rely heavily on selling inventory.
However, it's essential to consider that a quick ratio significantly above 1 may indicate that a company is holding too many liquid assets that could be more effectively deployed elsewhere in the business. Therefore, while a high quick ratio demonstrates strong liquidity, it also signals underutilized assets. Conversely, a quick ratio significantly below 1 might raise concerns about the company's ability to meet its short-term obligations.
In summary, Agilent Technologies Inc.'s quick ratio has shown fluctuations over the past five years, with the most recent figure indicating an improvement in the company's short-term liquidity position. This suggests that the company is well-equipped to meet its immediate financial obligations and manage potential short-term liquidity risks.
Peer comparison
Oct 31, 2023