AutoZone Inc (AZO)

Quick ratio

		Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019
Cash	US$ in thousands	277,054	264,380	1,171,340	1,750,820	176,300
Short-term investments	US$ in thousands	39,639	49,768	46,007	76,118	67,958
Receivables	US$ in thousands	520,385	504,886	378,392	364,774	308,995
Total current liabilities	US$ in thousands	8,511,860	8,588,390	7,369,750	6,283,090	5,512,140
Quick ratio		0.10	0.10	0.22	0.35	0.10

August 26, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($277,054K + $39,639K + $520,385K) ÷ $8,511,860K
= 0.10

The quick ratio measures a company's ability to meet its short-term obligations using its most liquid assets. It is calculated by dividing quick assets (current assets excluding inventory) by current liabilities.

Looking at Autozone Inc.'s quick ratio over the past five years, we can observe fluctuations in the company's ability to cover its short-term liabilities with its quick assets.

In 2023, the quick ratio stands at 0.12, remaining constant from the previous year. This indicates that for every dollar of current liabilities, Autozone Inc. has $0.12 of quick assets available to meet those obligations. While the quick ratio has not improved, it is essential to note the significant dip compared to 2021 when the quick ratio was 0.24.

In 2021, Autozone had a quick ratio of 0.24, showing a slight decrease compared to 2020, where the quick ratio was 0.37. This decline indicates a reduction in the company's ability to meet short-term obligations using its quick assets. It's worth noting that the quick ratio in 2021 was still higher than in 2019 when it stood at 0.13.

The quick ratio of 0.37 in 2020 indicated a significant increase from the previous year, suggesting improvements in Autozone Inc.'s liquidity and ability to cover short-term liabilities.

Overall, the fluctuating trend in Autozone's quick ratio over the past five years reflects changes in the company's liquidity position. The dip in 2023 compared to 2021 and 2020 warrants further investigation into the company's management of quick assets and short-term liabilities. Additionally, it would be important to consider industry benchmarks and peer analysis to gain a better understanding of Autozone Inc.'s liquidity position.