Adobe Systems Incorporated (ADBE)
Quick ratio
| Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | Nov 29, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 7,141,000 | 4,236,000 | 3,844,000 | 4,478,000 | 2,650,000 |
| Short-term investments | US$ in thousands | 701,000 | 1,860,000 | 1,954,000 | 1,514,000 | 1,527,000 |
| Receivables | US$ in thousands | 2,224,000 | 2,070,000 | 1,878,000 | 1,398,000 | 1,530,000 |
| Total current liabilities | US$ in thousands | 8,251,000 | 8,128,000 | 6,932,000 | 5,512,000 | 8,191,000 |
| Quick ratio | 1.22 | 1.00 | 1.11 | 1.34 | 0.70 |
December 1, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($7,141,000K
+ $701,000K
+ $2,224,000K)
÷ $8,251,000K
= 1.22
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of 1 or higher is generally considered healthy as it indicates that a company has enough liquid assets to cover its short-term liabilities.
Looking at the quick ratio trend for Adobe Inc over the past five years, we can observe fluctuation in the ratio. In 2019, the quick ratio was relatively low at 0.79, suggesting that the company may have had difficulty meeting its short-term obligations with its liquid assets alone. However, in the subsequent years, the quick ratio improved significantly, reaching 1.48 in 2020, 1.25 in 2021, 1.11 in 2022, and 1.34 in 2023.
The increasing trend in the quick ratio indicates that Adobe Inc has been more capable of covering its short-term liabilities with its quick assets over the years. This suggests improved liquidity and financial stability, which can be attributed to effective management of current assets and liabilities.
Overall, the trend in Adobe Inc's quick ratio demonstrates a positive trajectory, indicating an improved ability to meet its short-term financial obligations with its liquid assets. However, it is essential to consider other financial metrics and qualitative factors in conjunction with the quick ratio for a comprehensive assessment of the company's financial health.
Peer comparison
Dec 1, 2023