Smith AO Corporation (AOS)
Quick ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 239,600 | 219,300 | 216,100 | 251,600 | 339,900 | 281,000 | 378,900 | 406,200 | 391,200 | 358,800 | 359,400 | 405,800 | 443,300 | 486,100 | 444,800 | 578,500 | 573,100 | 377,900 | 442,700 | 416,100 |
| Short-term investments | US$ in thousands | 36,500 | 36,300 | 17,200 | 51,500 | 23,500 | 60,800 | 30,800 | 89,800 | 90,600 | 58,300 | 100,000 | 173,600 | 188,100 | 199,100 | 137,100 | 87,000 | 116,500 | 131,100 | 126,000 | 135,600 |
| Receivables | US$ in thousands | 541,400 | 558,200 | 649,900 | 584,600 | 596,000 | 587,400 | 588,900 | 586,800 | 581,200 | 564,200 | 621,500 | 608,300 | 634,400 | 623,800 | 607,000 | 534,500 | 585,000 | 572,900 | 515,900 | 524,000 |
| Total current liabilities | US$ in thousands | 897,200 | 844,200 | 872,400 | 883,400 | 945,300 | 895,600 | 860,700 | 895,700 | 934,200 | 900,900 | 928,300 | 1,002,100 | 1,118,800 | 982,600 | 907,000 | 836,100 | 886,300 | 805,900 | 735,400 | 699,100 |
| Quick ratio | 0.91 | 0.96 | 1.01 | 1.00 | 1.01 | 1.04 | 1.16 | 1.21 | 1.14 | 1.09 | 1.16 | 1.19 | 1.13 | 1.33 | 1.31 | 1.44 | 1.44 | 1.34 | 1.47 | 1.54 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($239,600K
+ $36,500K
+ $541,400K)
÷ $897,200K
= 0.91
The quick ratio of Smith AO Corporation has shown a declining trend over the past few years. Starting at a healthy level of 1.54 in March 2020, the quick ratio decreased to 0.91 by December 2024. This indicates a potential deterioration in the company's ability to meet its short-term obligations using its most liquid assets.
The quick ratio measures the ability of a company to cover its current liabilities with its most liquid assets, excluding inventory. A quick ratio above 1 indicates that the company has enough liquid assets to cover its short-term liabilities. However, a declining quick ratio may raise concerns about the company's liquidity position and its ability to meet its immediate financial obligations.
It would be advisable for Smith AO Corporation to monitor its quick ratio closely and take necessary steps to improve liquidity, such as increasing cash reserves or reducing short-term liabilities, to ensure financial stability and mitigate liquidity risks in the future.
Peer comparison
Dec 31, 2024