Ecolab Inc (ECL)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	1,256,800	919,500	598,600	359,900	1,260,200
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	4,792,800	4,345,800	4,210,400	3,553,200	2,932,200
Quick ratio		0.26	0.21	0.14	0.10	0.43

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,256,800K + $—K + $—K) ÷ $4,792,800K
= 0.26

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 below 1 indicates that a company may have difficulty covering its current liabilities with its liquid assets.

For Ecolab Inc, the quick ratio has been fluctuating over the past five years. As of December 31, 2020, the quick ratio was 0.43, indicating that Ecolab had $0.43 in liquid assets to cover each dollar of its current liabilities. However, by December 31, 2021, the quick ratio had decreased to 0.10, signaling a significant decline in liquidity.

Subsequently, Ecolab managed to improve its quick ratio to 0.14 by December 31, 2022, and further to 0.21 by December 31, 2023. Although these ratios show some improvement, they are still below 1, suggesting that Ecolab's liquidity position remains a concern.

By December 31, 2024, the quick ratio for Ecolab reached 0.26, showing a continued upward trend but still falling short of the ideal ratio. Ecolab may need to focus on increasing its liquid assets or managing its current liabilities more efficiently to enhance its liquidity position and ensure it can meet its short-term obligations.