The Chefs Warehouse Inc (CHEF)
Quick ratio
| 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 23, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 114,655 | 50,705 | 38,340 | 42,266 | 49,878 | 33,058 | 59,592 | 91,742 | 158,800 | 145,425 | 51,806 | 79,439 | 115,155 | 134,217 | 146,920 | 175,000 | 193,281 | 208,545 | 201,824 | 193,517 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Receivables | US$ in thousands | 366,311 | 359,954 | 348,677 | 336,399 | 334,015 | 338,613 | 322,625 | 274,598 | 260,167 | 208,939 | 208,229 | 169,792 | 172,540 | 151,720 | 136,072 | 99,459 | 96,383 | 100,576 | 105,125 | 144,263 |
| Total current liabilities | US$ in thousands | 425,396 | 429,113 | 399,534 | 359,867 | 385,777 | 350,218 | 333,433 | 304,228 | 283,745 | 236,890 | 230,929 | 194,171 | 197,018 | 183,902 | 175,883 | 129,834 | 118,102 | 135,143 | 121,669 | 152,430 |
| Quick ratio | 1.13 | 0.96 | 0.97 | 1.05 | 1.00 | 1.06 | 1.15 | 1.20 | 1.48 | 1.50 | 1.13 | 1.28 | 1.46 | 1.55 | 1.61 | 2.11 | 2.45 | 2.29 | 2.52 | 2.22 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($114,655K
+ $—K
+ $366,311K)
÷ $425,396K
= 1.13
The quick ratio, also known as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory. A quick ratio of 1 or higher is generally considered acceptable, as it indicates that the company can meet its short-term obligations without relying heavily on inventory liquidation.
Analyzing the quick ratio trend of The Chefs Warehouse Inc over the years from March 31, 2020, to December 31, 2024, we observe the following:
- The quick ratio was relatively strong in the first half of the period, ranging between 2.22 and 2.52. This indicates that the company had significant liquid assets to cover its short-term liabilities during this time frame.
- However, starting from June 30, 2021, the quick ratio began to decline gradually, dropping to 1.13 by June 30, 2023. This downward trend suggests a potential weakening of the company's ability to meet its short-term obligations without relying on inventory.
- Despite a slight improvement in the quick ratio by December 31, 2023, and December 31, 2024, where it stood at 1.00 and 1.13, respectively, the ratio remains below the ideal threshold of 1. This indicates that The Chefs Warehouse Inc may face challenges in covering its short-term liabilities solely with its most liquid assets.
Overall, the decreasing trend in the quick ratio of The Chefs Warehouse Inc raises concerns about its liquidity position and highlights the need for the company to closely monitor and manage its short-term liquidity to ensure financial stability and operational continuity.
Peer comparison
Dec 31, 2024