Embecta Corp (EMBC)

Quick ratio

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Cash	US$ in thousands	267,500	275,100	299,800	298,700	326,300	317,400	346,400	385,200	330,900	292,300	264,300	0
Short-term investments	US$ in thousands	—	—	—	—	200	—	—	—	—	—	—	—
Receivables	US$ in thousands	246,800	243,400	167,000	206,400	159,100	190,100	152,700	143,300	133,100	119,200	15,200	118,300
Total current liabilities	US$ in thousands	374,000	370,700	310,400	326,600	353,500	385,800	357,700	370,300	301,000	228,500	168,900	159,100
Quick ratio		1.38	1.40	1.50	1.55	1.37	1.32	1.40	1.43	1.54	1.80	1.65	0.74

September 30, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($267,500K + $—K + $246,800K) ÷ $374,000K
= 1.38

The quick ratio of Embecta Corp has been relatively stable and consistently above the industry average over the past few quarters. The quick ratio measures the company's ability to meet its short-term obligations using its most liquid assets. The upward trend in the quick ratio from 0.74 in December 2021 to 1.38 in September 2024 indicates an improvement in the company's liquidity position.

A quick ratio above 1.0 indicates that the company has an adequate level of liquid assets to cover its current liabilities, implying a lower risk of financial distress. Embecta Corp's quick ratio has generally been healthy, ranging from 1.32 to 1.80 over the past few quarters.

The quick ratio of 1.38 as of September 30, 2024, suggests that Embecta Corp had $1.38 in highly liquid assets available to cover each dollar of its current liabilities. This indicates a strong liquidity position, providing the company with a buffer to meet its short-term obligations without relying heavily on inventory.

Overall, the consistent and upward trend in Embecta Corp's quick ratio signifies a strong liquidity position, which could indicate efficient management of working capital and potential financial stability in the short term. It is important for the company to maintain this liquidity position to navigate any unforeseen challenges or capitalize on potential opportunities in the market.