Chemed Corp (CHE)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 178,350 263,958 74,126 32,895 162,675
Short-term investments US$ in thousands — — — — 88,811
Receivables US$ in thousands — — — — —
Total current liabilities US$ in thousands 285,695 312,050 297,205 302,399 299,108
Quick ratio 0.62 0.85 0.25 0.11 0.84

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($178,350K + $—K + $—K) ÷ $285,695K
= 0.62

The quick ratio of Chemed Corp, a measure of its short-term liquidity, has displayed fluctuations over the past five years. As of December 31, 2020, Chemed Corp had a quick ratio of 0.84, indicating that it had $0.84 in liquid assets available to cover each dollar of current liabilities. However, by December 31, 2021, the quick ratio had declined significantly to 0.11, suggesting a potential strain on the company's ability to meet its short-term obligations with its readily available assets.

Subsequently, by December 31, 2022, the quick ratio improved to 0.25, although it remained below the ideal threshold of 1. This could imply a continued challenge in Chemed Corp's ability to quickly convert its current assets into cash to meet its current liabilities.

The quick ratio saw a notable recovery by December 31, 2023, reaching 0.85, indicating a more favorable position in terms of liquidity. However, by December 31, 2024, the quick ratio decreased to 0.62, showing a slight decrease in the company's ability to cover its short-term obligations with its liquid assets compared to the previous year.

Overall, the fluctuating quick ratio of Chemed Corp over the five-year period suggests varying levels of liquidity management. Investors and stakeholders may need to closely monitor the company's ability to maintain adequate short-term liquidity to meet its financial commitments.