Dril-Quip Inc (DRQ)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 187,323 | 259,407 | 355,451 | 345,955 | 398,946 |
| Short-term investments | US$ in thousands | 25,908 | 32,232 | 0 | — | — |
| Receivables | US$ in thousands | 283,998 | 235,932 | 203,584 | 256,520 | 248,160 |
| Total current liabilities | US$ in thousands | 117,703 | 87,555 | 93,663 | 85,512 | 96,940 |
| Quick ratio | 4.22 | 6.03 | 5.97 | 7.05 | 6.68 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($187,323K
+ $25,908K
+ $283,998K)
÷ $117,703K
= 4.22
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. Dril-Quip, Inc.'s quick ratio has shown some fluctuation over the past five years, ranging from 4.43 in 2023 to 7.61 in 2020. The quick ratio has generally remained above 1, indicating a strong ability to cover its current liabilities with its quick assets.
A higher quick ratio is typically considered favorable as it suggests a greater ability to meet short-term obligations without relying on selling inventory. Dril-Quip's quick ratios over the period have been consistently above 1, reflecting a healthy liquidity position.
While the quick ratio decreased in 2023 compared to the previous year, it still indicates that Dril-Quip has sufficient quick assets to cover its current liabilities. It is important to consider the industry norms and trends when evaluating the significance of changes in the quick ratio over time.
Peer comparison
Dec 31, 2023