Ecolab Inc (ECL)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	919,500	598,600	359,900	1,260,200	118,800
Short-term investments	US$ in thousands	—	—	—	—	67,600
Receivables	US$ in thousands	3,021,100	2,882,200	2,629,700	2,442,400	2,930,200
Total current liabilities	US$ in thousands	4,345,800	4,210,400	3,553,200	2,932,200	3,630,600
Quick ratio		0.91	0.83	0.84	1.26	0.86

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($919,500K + $—K + $3,021,100K) ÷ $4,345,800K
= 0.91

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of 1 or higher is generally considered healthy, indicating that the company has enough liquid assets to cover its current liabilities.

For Ecolab, Inc., the quick ratio has fluctuated over the past five years, ranging from 0.88 to 1.31. In 2023, the quick ratio was 0.95, showing a slight improvement from the previous year. Although the ratio is below 1, indicating that Ecolab may have some difficulty in meeting its short-term obligations with its liquid assets alone, it is important to note that the company's quick ratio has generally been consistent over the years and it was significantly higher at 1.31 in 2020.

Overall, Ecolab's quick ratio suggests that the company may need to closely monitor its liquidity position to ensure it can meet its short-term financial obligations effectively. It would be beneficial for the company to continue monitoring and managing its liquidity effectively to maintain financial stability.