Now Inc (DNOW)
Quick ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 299,000 | 194,000 | 203,000 | 168,000 | 212,000 | 267,000 | 232,000 | 293,000 | 313,000 | 312,000 | 293,000 | 374,000 | 387,000 | 325,000 | 269,000 | 202,000 | 183,000 | 113,000 | 80,000 | 87,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Receivables | US$ in thousands | 384,000 | 396,000 | 417,000 | 422,000 | 398,000 | 406,000 | 389,000 | 341,000 | 304,000 | 299,000 | 271,000 | 245,000 | 198,000 | 213,000 | 242,000 | 366,000 | 370,000 | 466,000 | 496,000 | 513,000 |
| Total current liabilities | US$ in thousands | 418,000 | 423,000 | 501,000 | 447,000 | 439,000 | 458,000 | 408,000 | 395,000 | 369,000 | 375,000 | 341,000 | 298,000 | 272,000 | 264,000 | 278,000 | 385,000 | 396,000 | 470,000 | 468,000 | 475,000 |
| Quick ratio | 1.63 | 1.39 | 1.24 | 1.32 | 1.39 | 1.47 | 1.52 | 1.61 | 1.67 | 1.63 | 1.65 | 2.08 | 2.15 | 2.04 | 1.84 | 1.48 | 1.40 | 1.23 | 1.23 | 1.26 |
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 remained relatively stable over the past eight quarters, ranging from 1.30 to 1.68. This ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that NOW Inc has more than enough liquid assets to cover its current liabilities, providing a margin of safety.
The gradual decrease in the quick ratio from Q4 2023 to Q2 2023 could be a cause for concern, as it indicates a slight weakening in the company's short-term liquidity position. However, the quick ratio improved slightly in Q3 and Q4 2023, suggesting a potential recovery in liquidity.
Overall, NOW Inc's quick ratio appears to be healthy and well-managed, with the current level indicating a strong ability to meet its short-term obligations with liquid assets. It is essential for the company to continue monitoring and managing its liquidity position effectively to maintain financial stability in the future.
Peer comparison
Dec 31, 2023