Ashland Global Holdings Inc (ASH)
Quick ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 417,000 | 646,000 | 210,000 | 454,000 | 232,000 |
| Short-term investments | US$ in thousands | 77,000 | 61,000 | 37,000 | 30,000 | 24,000 |
| Receivables | US$ in thousands | 338,000 | 402,000 | 369,000 | 471,000 | 481,000 |
| Total current liabilities | US$ in thousands | 456,000 | 553,000 | 934,000 | 813,000 | 757,000 |
| Quick ratio | 1.82 | 2.01 | 0.66 | 1.17 | 0.97 |
September 30, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($417,000K
+ $77,000K
+ $338,000K)
÷ $456,000K
= 1.82
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A value greater than 1 indicates that the company has sufficient liquid assets to cover its short-term liabilities.
Looking at Ashland Inc's quick ratio over the past five years, we can see a fluctuating trend. In 2023, the quick ratio stood at 1.93, indicating a slight decrease from the previous year's 2.06. This suggests that the company's ability to cover its short-term liabilities with its liquid assets has decreased.
In 2022, the quick ratio was relatively strong at 2.06, indicating the company's healthy liquidity position. However, in 2021, the quick ratio was notably lower at 0.69, signaling potential liquidity concerns as the company's ability to cover its short-term obligations was constrained.
The quick ratio improved in 2020 to 1.24 from 1.03 in 2019, indicating an enhanced ability to meet its short-term obligations with liquid assets. Overall, the quick ratio has shown some volatility, with periods of both strength and potential liquidity challenges.
It's important to explore the underlying reasons for these fluctuations and consider additional financial metrics to gain a comprehensive understanding of Ashland Inc's liquidity position and its ability to manage short-term financial obligations.
In summary, although the quick ratio shows some fluctuations in recent years, it is crucial to assess this ratio in conjunction with other relevant financial metrics and qualitative factors to comprehensively evaluate the company's liquidity position and its ability to meet short-term financial obligations.
Peer comparison
Sep 30, 2023