ELF Beauty Inc (ELF)

Quick ratio

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Cash	US$ in thousands	—	108,183	120,778	43,353	57,768
Short-term investments	US$ in thousands	—	—	—	—	2,875
Receivables	US$ in thousands	—	123,797	67,928	45,567	40,185
Total current liabilities	US$ in thousands	—	299,115	107,976	65,017	73,331
Quick ratio		—	0.78	1.75	1.37	1.37

March 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($—K + $—K + $—K) ÷ $—K
= —

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. ELF Beauty Inc's quick ratio has shown fluctuations over the years based on the provided data. As of March 31, 2021, and March 31, 2022, the quick ratio stood at 1.37, indicating that the company had $1.37 in liquid assets available to cover each dollar of its current liabilities.

The quick ratio increased to 1.75 by March 31, 2023, suggesting an improvement in the company's short-term liquidity position. This means that ELF Beauty Inc had more than enough liquid assets to cover its current liabilities comfortably.

However, there was a significant decline in the quick ratio to 0.78 by March 31, 2024. A quick ratio below 1.0 may raise concerns about the company's ability to meet its short-term obligations using its liquid assets alone.

The quick ratio for March 31, 2025, was not provided (marked as "—"), making it difficult to assess the company's liquidity position for that year. Further information would be needed to determine whether this missing data point reflects a deliberate decision or a reporting issue.

Overall, it is important for ELF Beauty Inc to monitor its quick ratio consistently to ensure that it maintains a healthy liquidity position, which is crucial for meeting short-term financial obligations and weathering unforeseen financial challenges.