Apple Inc (AAPL)
Quick ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 29,965,000 | 23,646,000 | 34,940,000 | 38,016,000 | 48,844,000 |
| Short-term investments | US$ in thousands | 31,590,000 | 24,658,000 | 27,699,000 | 52,927,000 | 51,713,000 |
| Receivables | US$ in thousands | 60,985,000 | 60,932,000 | 51,506,000 | 37,445,000 | 45,804,000 |
| Total current liabilities | US$ in thousands | 145,308,000 | 153,982,000 | 125,481,000 | 105,392,000 | 105,718,000 |
| Quick ratio | 0.84 | 0.71 | 0.91 | 1.22 | 1.38 |
September 30, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($29,965,000K
+ $31,590,000K
+ $60,985,000K)
÷ $145,308,000K
= 0.84
The quick ratio, also known as the acid-test ratio, provides insight into a company's short-term liquidity and its ability to meet its short-term liabilities using its most liquid assets. A quick ratio of 1 or higher is generally considered satisfactory, as it indicates that a company has enough liquid assets to cover its short-term liabilities.
Looking at Apple Inc's quick ratio over the past five years, we can observe a decreasing trend from 2019 to 2023. In 2019, the quick ratio was 1.50, indicating that the company had $1.50 in liquid assets available to cover each dollar of its current liabilities. This high ratio suggests a strong ability to meet short-term obligations.
However, over the subsequent years, the quick ratio declined steadily. By 2023, the quick ratio had decreased to 0.94, which suggests a reduction in the company's ability to cover its short-term liabilities with its most liquid assets. This decline may raise concerns about Apple Inc's short-term liquidity position.
It is essential to consider the reasons behind this decline in the quick ratio. A decrease in the quick ratio could be due to a decrease in liquid assets or an increase in current liabilities. It indicates that Apple Inc may have less cash or easily marketable securities relative to its current liabilities than it did in 2019. It could also indicate an increase in short-term obligations that need to be met in the near future.
Investors and analysts should further investigate the components of Apple Inc's quick ratio to understand the drivers behind this trend and assess the company's short-term liquidity risk. Additionally, they should consider comparing the quick ratio with industry benchmarks and competitors' ratios to gain further insights into Apple Inc's liquidity position.
Peer comparison
Sep 30, 2023