Acuity Brands Inc (AYI)
Quick ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 397,900 | 223,200 | 491,300 | 560,700 | 461,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 555,300 | 665,900 | 571,800 | 500,300 | 561,000 |
| Total current liabilities | US$ in thousands | 595,400 | 733,600 | 692,200 | 617,600 | 596,100 |
| Quick ratio | 1.60 | 1.21 | 1.54 | 1.72 | 1.71 |
August 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($397,900K
+ $—K
+ $555,300K)
÷ $595,400K
= 1.60
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 quick ratio of 1 indicates that a company's current assets are equal to its current liabilities, providing a margin of safety in meeting short-term obligations.
Analyzing Acuity Brands, Inc.'s quick ratio over the past five years, it is evident that the company has maintained a consistently strong position in terms of short-term liquidity. With a quick ratio of 1.72 as of August 31, 2023, the company's ability to cover its current liabilities using its quick assets remains robust, demonstrating a healthy financial position in the short term. When compared to the previous years, the quick ratio has fluctuated slightly, but has generally remained above 1, indicating prudent management of short-term liquidity.
The upward trend between 2020 and 2021, followed by a slight decline in 2022, could indicate changes in the nature of current assets and liabilities relative to the company's operations. Nevertheless, the quick ratio remains at a level that suggests Acuity Brands, Inc. has ample liquid assets to cover its short-term liabilities, providing investors and creditors with confidence in the company's ability to manage its short-term financial obligations effectively.
Overall, the quick ratio trend for Acuity Brands, Inc. reflects a consistent commitment to maintaining a strong liquidity position, which is favorable for the company's financial stability and operational flexibility.
Peer comparison
Aug 31, 2023