Dril-Quip Inc (DRQ)
Current 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 719,717 | 709,040 | 755,156 | 752,111 | 750,024 | 743,837 | 747,863 | 717,376 | 745,052 | 827,271 | 849,286 | 844,721 | 863,193 | 863,002 | 848,212 | 826,291 | 880,489 | 878,719 | 868,143 | 843,340 |
| Total current liabilities | US$ in thousands | 117,703 | 106,735 | 88,124 | 83,360 | 87,555 | 89,287 | 84,856 | 70,321 | 93,663 | 91,826 | 106,535 | 95,307 | 85,512 | 100,982 | 113,711 | 93,446 | 96,940 | 96,533 | 87,097 | 70,729 |
| Current ratio | 6.11 | 6.64 | 8.57 | 9.02 | 8.57 | 8.33 | 8.81 | 10.20 | 7.95 | 9.01 | 7.97 | 8.86 | 10.09 | 8.55 | 7.46 | 8.84 | 9.08 | 9.10 | 9.97 | 11.92 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $719,717K ÷ $117,703K
= 6.11
The current ratio of Dril-Quip, Inc. has shown a decreasing trend over the past four quarters, dropping from 10.20 in Q1 2022 to 6.11 in Q4 2023. This indicates that the company may be facing potential liquidity challenges as its current assets may not be sufficient to cover its current liabilities.
While a high current ratio is generally preferred as it suggests strong liquidity and the ability to meet short-term obligations, it is important to note that an excessively high current ratio may also indicate inefficient use of assets. Therefore, a balance needs to be struck to ensure optimal liquidity management.
In this case, the decreasing trend in the current ratio may prompt further analysis into the company's working capital management and efficiency in converting current assets into cash. It may also signal the need for closer monitoring of the company's liquidity position to avoid potential cash flow issues in the future.
Peer comparison
Dec 31, 2023