Commercial Metals Company (CMC)

Quick ratio

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Cash	US$ in thousands	857,922	592,332	672,596	497,745	542,103
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	1,158,950	1,240,220	1,358,910	1,105,580	880,728
Total current liabilities	US$ in thousands	834,850	843,714	1,356,990	980,473	745,263
Quick ratio		2.42	2.17	1.50	1.64	1.91

August 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($857,922K + $—K + $1,158,950K) ÷ $834,850K
= 2.42

The quick ratio of Commercial Metals Company has exhibited fluctuations over the past five years. The quick ratio measures the company's ability to meet its short-term obligations using its most liquid assets. A higher quick ratio indicates a stronger liquidity position.

In 2024, the quick ratio improved to 2.42, indicating that the company had $2.42 in liquid assets available to cover each dollar of current liabilities. This represents a significant increase from the prior year's quick ratio of 2.17.

In 2023, the quick ratio was 1.50, reflecting a decrease from the previous year. This may suggest a potential liquidity concern as the company had $1.50 in quick assets for every dollar of current liabilities.

The quick ratio in 2022 was 1.64, showing a slight improvement from the previous year but still below the ideal ratio of 2:1. The company's ability to cover immediate obligations with liquid assets was somewhat constrained.

In 2021, the quick ratio was 1.91, which indicated a better liquidity position compared to the previous year. The company had $1.91 in quick assets for each dollar of current liabilities.

Overall, it is important for Commercial Metals Company to closely monitor its quick ratio to ensure it maintains a healthy liquidity position to meet its short-term obligations efficiently.