CAVA Group, Inc. (CAVA)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	366,120	332,428	39,125	140,332	394,300
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	12,996	11,885	7,735	6,060	400
Total current liabilities	US$ in thousands	132,636	109,036	84,318	51,725	108,300
Quick ratio		2.86	3.16	0.56	2.83	3.64

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($366,120K + $—K + $12,996K) ÷ $132,636K
= 2.86

The quick ratio of CAVA Group, Inc. has exhibited significant fluctuations over the observed period. As of December 31, 2020, the company's quick ratio stood at 3.64, indicating a strong liquidity position with ample liquid assets to cover its current liabilities without relying on inventory sales. This ratio decreased markedly in 2021, falling to 2.83, which still reflects a solid liquidity buffer but suggests some shift or strain in liquid asset levels relative to current liabilities.

A dramatic decline occurred by December 31, 2022, when the quick ratio dropped sharply to 0.56. This indicates a substantial deterioration in liquidity, implying that the company's liquid assets were only just over half of its current liabilities. Such a low ratio points to potential liquidity challenges, limited immediate liquidity, or a significant increase in current liabilities without a matching increase in liquid assets.

Subsequently, by December 31, 2023, the quick ratio rebounded to 3.16, restoring a more favorable liquidity stance comparable to early years. The ratio remained relatively stable in 2024 at 2.86, again indicating a position where liquid assets more than adequately cover current obligations.

Overall, the trend suggests periods of high liquidity with a notable dip in 2022, followed by recovery, reflecting changes in cash or receivables levels, current liabilities, or both. The fluctuations highlight the importance of examining underlying factors influencing the company's liquidity stance across these years.