Eastman Chemical Company (EMN)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 548,000 | 493,000 | 459,000 | 564,000 | 204,000 |
| Short-term investments | US$ in thousands | 1,000 | 1,000 | 26,000 | 1,000 | 1,000 |
| Receivables | US$ in thousands | 888,000 | 992,000 | 1,264,000 | 1,344,000 | 1,191,000 |
| Total current liabilities | US$ in thousands | 2,576,000 | 3,251,000 | 2,971,000 | 2,038,000 | 1,789,000 |
| Quick ratio | 0.56 | 0.46 | 0.59 | 0.94 | 0.78 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($548,000K
+ $1,000K
+ $888,000K)
÷ $2,576,000K
= 0.56
The quick ratio of Eastman Chemical Co has fluctuated over the past five years, ranging from a low of 0.58 in 2022 to a high of 1.06 in 2020. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets, excluding inventory. A quick ratio below 1 indicates that the company may have difficulty in meeting its short-term obligations if they all came due at once.
In 2023 and 2021, the quick ratio was 0.70 and 0.72 respectively, suggesting that Eastman Chemical Co may have struggled to cover its short-term liabilities with its quick assets during those years. This could raise concerns about the company's liquidity position.
On the other hand, in 2020, the quick ratio was notably higher at 1.06, indicating a stronger ability to meet short-term obligations without relying heavily on inventory. This may signal a better liquidity position for the company during that period.
Overall, fluctuations in the quick ratio of Eastman Chemical Co over the years indicate varying levels of liquidity and ability to meet short-term obligations with its liquid assets. Investors and stakeholders should monitor these trends to assess the company's financial health and short-term liquidity risk.
Peer comparison
Dec 31, 2023