Dropbox Inc (DBX)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	614,900	232,800	533,000	314,900	551,300
Short-term investments	US$ in thousands	741,100	1,110,600	1,185,100	806,400	607,700
Receivables	US$ in thousands	75,600	60,300	53,700	46,100	44,100
Total current liabilities	US$ in thousands	1,201,500	1,196,500	1,175,800	1,087,800	1,014,800
Quick ratio		1.19	1.17	1.51	1.07	1.19

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($614,900K + $741,100K + $75,600K) ÷ $1,201,500K
= 1.19

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. A quick ratio above 1 indicates that a company has enough liquid assets to cover its current liabilities.

Based on the data provided, Dropbox Inc's quick ratio has been relatively stable over the past five years, ranging from 1.13 to 1.57. In 2023, the quick ratio was 1.26, slightly higher than the previous year's ratio of 1.25. This implies that Dropbox Inc had $1.26 of liquid assets available to cover each dollar of current liabilities at the end of 2023.

Having a quick ratio above 1 indicates that Dropbox Inc has a sufficient level of liquid assets to meet its short-term obligations. The company's quick ratio trend over the years suggests that it has maintained a healthy liquidity position, which is a positive indicator of its financial health and ability to navigate short-term financial challenges.