Dow Inc (DOW)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	2,987,000	3,886,000	2,988,000	5,104,000	2,367,000
Short-term investments	US$ in thousands	1,705,000	949,000	265,000	45,000	21,000
Receivables	US$ in thousands	6,614,000	7,755,000	9,554,000	7,390,000	7,555,000
Total current liabilities	US$ in thousands	9,957,000	11,331,000	13,226,000	11,108,000	10,679,000
Quick ratio		1.14	1.11	0.97	1.13	0.93

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,987,000K + $1,705,000K + $6,614,000K) ÷ $9,957,000K
= 1.14

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. It is calculated by dividing the sum of cash, cash equivalents, and accounts receivable by current liabilities.

Analyzing Dow Inc's quick ratio over the past five years reveals fluctuations in its short-term liquidity position. In 2023, the quick ratio stood at 1.16, indicating that for every dollar of current liabilities, the company had $1.16 of liquid assets available to meet those obligations. This suggests a healthy liquidity position.

Comparing this to previous years, we observe a relatively stable trend. The quick ratio was 1.19 in 2022, 1.02 in 2021, 1.20 in 2020, and 0.99 in 2019. These figures highlight the company's varying ability to cover short-term liabilities with its liquid assets, with the ratio peaking in 2020 and dipping in 2021 before recovering in 2023.

Overall, the trend in Dow Inc's quick ratio indicates a generally healthy ability to meet short-term obligations with liquid assets. However, it is essential to assess the composition and quality of the liquid assets and the nature of the current liabilities to gain a more comprehensive understanding of the company's short-term liquidity position.