American Eagle Outfitters Inc (AEO)

Quick ratio

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Cash	US$ in thousands	354,094	170,209	434,770	850,477	361,930
Short-term investments	US$ in thousands	100,000	85,249	296,012	325,507	55,000
Receivables	US$ in thousands	247,934	252,358	296,493	159,339	119,064
Total current liabilities	US$ in thousands	891,172	768,948	842,871	858,482	751,756
Quick ratio		0.79	0.66	1.22	1.56	0.71

February 3, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($354,094K + $100,000K + $247,934K) ÷ $891,172K
= 0.79

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current liabilities using its most liquid assets. A quick ratio of less than 1 indicates that a company may have difficulty meeting its short-term obligations.

American Eagle Outfitters Inc's quick ratio has fluctuated over the past five years. In 2024, the quick ratio was 0.79, indicating that the company may face challenges in meeting its short-term liabilities with its liquid assets alone. This represents a slight improvement from the previous year's quick ratio of 0.66.

Looking back further, in 2022, American Eagle Outfitters Inc had a quick ratio of 1.22, suggesting a stronger ability to cover its current liabilities using its quick assets. The quick ratio was even higher in 2021 at 1.56, reflecting an improving liquidity position.

However, there was a decline in the quick ratio to 0.71 in 2020, indicating a potential liquidity strain for the company at that time.

Overall, American Eagle Outfitters Inc has experienced fluctuations in its quick ratio over the past five years. Investors and stakeholders should monitor the company's liquidity position closely to assess its ability to meet short-term obligations moving forward.