Equifax Inc (EFX)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 1,356,300 | 1,370,500 | 1,120,900 | 2,478,300 | 1,209,400 |
| Total current liabilities | US$ in thousands | 2,019,000 | 2,015,200 | 2,291,300 | 2,483,100 | 1,359,100 |
| Current ratio | 0.67 | 0.68 | 0.49 | 1.00 | 0.89 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,356,300K ÷ $2,019,000K
= 0.67
Equifax, Inc.'s current ratio has exhibited fluctuations over the past five years. The current ratio measures a company's ability to meet its short-term obligations with its current assets. A higher current ratio is generally preferred as it signifies a stronger liquidity position.
In 2023 and 2022, Equifax's current ratio stood at 0.67 and 0.68 respectively, indicating a slight improvement compared to previous years but still below the desirable benchmark of 1. This suggests that the company may have had challenges in meeting its short-term obligations with its current assets.
The current ratio significantly dropped to 0.49 in 2021, indicating a potential liquidity strain. However, there was a notable recovery in 2020 where the ratio improved to 1.00, indicating a healthier liquidity position, possibly due to better management of current assets and liabilities.
In 2019, the current ratio was 0.89, which although below the ideal ratio of 1, was higher than in the following years, indicating that Equifax had a more favorable liquidity position during that period compared to the subsequent years.
Overall, Equifax, Inc. should strive to maintain a current ratio above 1 to ensure it can meet its short-term financial obligations comfortably. Further analysis of the components contributing to current assets and liabilities could provide insights into areas for improvement in managing liquidity effectively.