Donaldson Company Inc (DCI)
Quick ratio
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 232,700 | 187,100 | 193,300 | 222,800 | 236,600 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 629,700 | 599,700 | 616,600 | 552,700 | 455,300 |
| Total current liabilities | US$ in thousands | 782,500 | 756,400 | 629,600 | 606,600 | 406,800 |
| Quick ratio | 1.10 | 1.04 | 1.29 | 1.28 | 1.70 |
July 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($232,700K
+ $—K
+ $629,700K)
÷ $782,500K
= 1.10
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 of 1 or higher is generally considered satisfactory, as it indicates that the company has enough liquid assets to cover its current liabilities.
In the case of Donaldson Company Inc, the quick ratio has fluctuated over the past five years. The quick ratio for the most recent fiscal year ending July 31, 2024, was 1.10, which indicates that the company has $1.10 of liquid assets available to cover each dollar of current liabilities. This suggests that Donaldson Company Inc may have a slightly lower level of liquidity compared to previous years.
The quick ratio for the previous fiscal year ending July 31, 2023, was 1.04, which was lower than the current year but still above the satisfactory threshold of 1. In the two years prior to that, the quick ratio was relatively higher at 1.29 and 1.28 for the fiscal years ending July 31, 2022, and July 31, 2021, respectively.
The quick ratio was notably high at 1.70 for the fiscal year ending July 31, 2020, indicating a higher level of liquidity compared to the more recent years. Overall, while the quick ratio for Donaldson Company Inc has varied over the years, it has generally remained above 1, suggesting that the company has had a solid ability to meet its short-term obligations with its liquid assets.