Box Inc (BOX)

Quick ratio

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Cash	US$ in thousands	383,742	428,465	416,274	595,082	195,586
Short-term investments	US$ in thousands	96,948	32,783	170,000	—	20,000
Receivables	US$ in thousands	281,487	264,515	256,312	228,309	209,434
Total current liabilities	US$ in thousands	679,280	715,827	718,975	612,839	577,434
Quick ratio		1.12	1.01	1.17	1.34	0.74

January 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($383,742K + $96,948K + $281,487K) ÷ $679,280K
= 1.12

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of 1 or higher is generally considered healthy, as it indicates that a company has enough liquid assets to cover its current liabilities.

For Box Inc, the quick ratio has fluctuated over the past five years. In 2024, the quick ratio stands at 1.12, indicating that the company has $1.12 of liquid assets available for every $1 of current liabilities. This suggests that Box Inc has a relatively strong ability to meet its short-term obligations.

Comparing this to previous years, we see a decreasing trend from 2021 to 2022, where the quick ratio fell from 1.34 to 1.17. However, the ratio improved in 2023 to 1.01 before increasing further in 2024 to 1.12.

The quick ratio of 0.74 in 2020 was relatively low, indicating that Box Inc had less liquidity to cover its short-term obligations at that time. Overall, the recent increase to 1.12 in 2024 reflects a positive trend in the company's liquidity position compared to previous years. It is important for Box Inc to continue monitoring and managing its liquidity to ensure it can meet its financial obligations effectively.