Ciena Corp (CIEN)
Quick ratio
| Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | Oct 31, 2017 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,010,620 | 994,352 | 1,422,550 | 1,088,620 | 640,513 |
| Short-term investments | US$ in thousands | 104,753 | 153,989 | 181,483 | 150,667 | 279,133 |
| Receivables | US$ in thousands | 1,037,280 | 944,798 | 903,366 | 741,386 | 633,887 |
| Total current liabilities | US$ in thousands | 932,021 | 1,040,580 | 909,030 | 760,701 | 1,037,740 |
| Quick ratio | 2.31 | 2.01 | 2.76 | 2.60 | 1.50 |
October 28, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,010,620K
+ $104,753K
+ $1,037,280K)
÷ $932,021K
= 2.31
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. It is calculated by dividing the sum of cash, cash equivalents, and accounts receivable by the current liabilities. A quick ratio of 1 or higher is generally considered healthy, indicating that a company has enough liquid assets to cover its short-term liabilities.
CIENA Corp.'s quick ratio has shown a fluctuating trend over the past five years, ranging from 2.34 to 3.10, with the most recent value being 2.71 as of October 28, 2023. This indicates that the company has consistently maintained a strong ability to meet its short-term obligations using its liquid assets. The fact that the quick ratio has consistently exceeded 1 over the years suggests that CIENA Corp. has a solid liquidity position and is capable of covering its short-term liabilities without relying heavily on inventory.
The upward trend in the quick ratio from 2021 to 2023 reflects an improvement in CIENA Corp.'s liquidity position, reaching its peak at 3.10 in 2021. However, the subsequent slight decrease to 2.71 in 2023 indicates a slight reduction in the company's ability to cover short-term liabilities with its most liquid assets, although the ratio still remains at a healthy level.
Overall, CIENA Corp.'s quick ratio portrays a positive picture of the company's liquidity position and its ability to meet short-term obligations, providing a level of assurance to investors, creditors, and other stakeholders regarding its financial health.
Peer comparison
Oct 28, 2023