CAVA Group, Inc. (CAVA)

Quick ratio

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022
Cash	US$ in thousands	289,350	366,120	367,160	343,748	329,117	332,428	340,399	352,845	22,716	39,125	39,125
Short-term investments	US$ in thousands	79,917	—	—	—	—	—	—	—	—	—	—
Receivables	US$ in thousands	15,917	12,996	13,200	13,889	11,732	11,885	12,692	11,878	11,516	7,735	7,735
Total current liabilities	US$ in thousands	134,278	132,636	134,441	123,601	111,308	109,036	112,931	114,698	106,088	84,318	84,318
Quick ratio		2.87	2.86	2.83	2.89	3.06	3.16	3.13	3.18	0.32	0.56	0.56

March 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($289,350K + $79,917K + $15,917K) ÷ $134,278K
= 2.87

The quick ratio of CAVA Group, Inc. exhibits considerable variability over the analyzed periods, reflecting fluctuations in the company's short-term liquidity position. In the fiscal year ending September 30, 2022, and December 31, 2022, the quick ratio remained steady at 0.56, indicating that the company's liquid assets were roughly half of its current liabilities during these periods. This suggests a relatively modest capacity to meet short-term obligations without relying on inventory sales.

Subsequently, a notable decline is observed in the quarter ending March 31, 2023, when the quick ratio decreased to 0.32. This decrease indicates a reduction in liquid assets relative to current liabilities, potentially signaling a diminished liquidity cushion or increased short-term obligations.

However, a substantial turnaround is observed starting in the quarter ending June 30, 2023, when the quick ratio soared to 3.18. This significant increase signifies that the company's liquid assets far exceed its current liabilities, marking a pronounced improvement in liquidity. The elevated ratio persisted into the subsequent quarters: 3.13 for September 30, 2023; 3.16 for December 31, 2023; and 3.06 for March 31, 2024, followed by a slight decline but remaining above 2.8 through June 30, 2024, and September 30, 2024.

Throughout these latter periods, the quick ratio remained comparatively stable and well above the generally accepted safe threshold of 1.0, indicating a robust liquidity position and a strong ability to cover short-term liabilities with liquid assets alone. The slight decreases observed in later periods suggest minor fluctuations but overall stability in liquidity.

In summary, the company's quick ratio trends depict a transition from a relatively constrained liquidity position in the early periods, with ratios below 1.0 critical threshold, to exceptional liquidity levels in the subsequent periods, with ratios exceeding 2.8. This evolution indicates a significant strengthening of CAVA Group, Inc.'s short-term liquidity and its capacity to meet immediate financial obligations without relying on inventory liquidation.