Dollar General Corporation (DG)

Quick ratio

		Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Cash	US$ in thousands	537,283	381,576	344,829	1,376,580	240,320
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	112,262	135,775	97,394	90,760	76,537
Total current liabilities	US$ in thousands	6,725,700	5,887,770	5,979,360	5,710,780	4,543,000
Quick ratio		0.10	0.09	0.07	0.26	0.07

February 2, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($537,283K + $—K + $112,262K) ÷ $6,725,700K
= 0.10

The quick ratio, also known as the acid-test ratio, measures Dollar General Corporation's ability to meet its short-term obligations with its most liquid assets. A higher quick ratio indicates a stronger liquidity position, as it shows the company's capacity to cover its current liabilities with its quick assets.

Looking at the historical trend of Dollar General Corporation's quick ratio, we observe fluctuations in the ratio over the past five years. In fiscal year 2024, the quick ratio stood at 0.10, slightly higher than the prior year's ratio of 0.09. The increase suggests a slight improvement in the company's liquidity position compared to the previous fiscal year.

However, when we compare the current quick ratio to the ratios from fiscal years 2022 and 2020, we notice a significant decline. The quick ratio in fiscal year 2024 is notably lower than the 0.26 recorded in fiscal year 2021, indicating a potential decrease in Dollar General's ability to cover its short-term obligations with its quick assets.

Overall, Dollar General Corporation's quick ratio has exhibited variability in recent years, with the latest figure indicating a relatively low level of liquidity compared to some previous periods. This may suggest a need for closer monitoring of the company's short-term financial health and management of its current assets and liabilities.