Now Inc (DNOW)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 299,000 | 212,000 | 313,000 | 387,000 | 183,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 384,000 | 398,000 | 304,000 | 198,000 | 370,000 |
| Total current liabilities | US$ in thousands | 418,000 | 439,000 | 369,000 | 272,000 | 396,000 |
| Quick ratio | 1.63 | 1.39 | 1.67 | 2.15 | 1.40 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($299,000K
+ $—K
+ $384,000K)
÷ $418,000K
= 1.63
The quick ratio of NOW Inc has fluctuated over the past five years. In 2023, the quick ratio was 1.68, indicating the company had $1.68 of liquid assets available to cover each $1 of current liabilities. This was an improvement from 2022 when the quick ratio was 1.45. The increase in 2023 suggests an enhanced ability to meet short-term obligations without relying heavily on inventory.
Comparing 2023 to 2021 and 2019, where the quick ratios were 1.72 and 1.43 respectively, NOW Inc's liquidity position has remained relatively stable. However, there was a significant decrease in quick ratio in 2020 when it dropped to 2.20, suggesting a potential liquidity issue or a change in the company's operational efficiency that year.
Overall, a quick ratio above 1 indicates that NOW Inc has enough liquid assets to cover its short-term liabilities, but investors and creditors may want to further assess the company's ability to generate cash and manage its short-term obligations effectively, especially compared to previous years.
Peer comparison
Dec 31, 2023