Commercial Metals Company (CMC)

Quick ratio

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Cash	US$ in thousands	592,332	672,596	497,745	542,103	192,461
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	1,240,220	1,358,910	1,105,580	880,728	1,016,090
Total current liabilities	US$ in thousands	843,714	1,356,990	980,473	745,263	694,590
Quick ratio		2.17	1.50	1.64	1.91	1.74

August 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($592,332K + $—K + $1,240,220K) ÷ $843,714K
= 2.17

The quick ratio of Commercial Metals Co. has exhibited fluctuations over the past five years, with a notable increase from 2021 to 2023. The company's quick ratio stood at 2.50 as of August 31, 2023, indicating a strong ability to meet its short-term obligations using its most liquid assets. This improvement suggests enhanced liquidity and a reduced reliance on inventory in meeting short-term liabilities. The upward trend in the quick ratio is indicative of a more conservative approach to managing short-term liquidity, which may enhance the company's financial stability and ability to weather economic uncertainties. However, it is important to note that such an increase in the quick ratio may also point to a potential underutilization of inventory or a slowdown in the turnover of current assets, which could impact the company's overall efficiency and profitability.