Envestnet Inc (ENV)

Quick ratio

		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	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash	US$ in thousands	91,378	43,211	59,019	52,664	162,173	241,330	338,115	359,614	429,279	393,799	369,524	371,977	384,565	362,918	92,244	68,601	82,505	71,632	77,717	245,735
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Receivables	US$ in thousands	124,999	117,428	123,696	122,704	104,211	101,094	82,878	90,937	96,601	120,149	83,965	82,380	81,748	76,328	74,871	81,133	69,734	64,402	71,632	66,365
Total current liabilities	US$ in thousands	292,534	270,245	308,904	297,652	327,064	616,268	610,036	274,807	288,723	269,405	247,814	228,921	236,369	226,320	209,285	202,918	203,790	366,317	353,474	338,726
Quick ratio		0.74	0.59	0.59	0.59	0.81	0.56	0.69	1.64	1.82	1.91	1.83	1.98	1.97	1.94	0.80	0.74	0.75	0.37	0.42	0.92

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($91,378K + $—K + $124,999K) ÷ $292,534K
= 0.74

The quick ratio, also known as the acid-test ratio, measures a company's ability to quickly cover its short-term liabilities with its most liquid assets. A quick ratio of 1 or higher is generally considered healthy as it indicates that the company can easily meet its short-term obligations.

Analyzing the quick ratio of Envestnet Inc. over the past eight quarters reveals fluctuations in its liquidity position. In Q4 2023, the quick ratio stood at 0.90, indicating that the company had $0.90 in liquid assets for every $1 of current liabilities. This suggests a relatively strong ability to meet its short-term obligations.

Comparing this to the previous quarters, we observe a fluctuating trend. The quick ratio has varied from a low of 0.64 in Q3 2022 to a high of 1.82 in Q1 2022. The significant increase in Q1 2022 to 1.82 indicates a very high level of liquidity, which may be due to a large increase in cash or a decrease in current liabilities.

The recent downward trend from the peak in Q1 2022 suggests a potential deterioration in Envestnet's liquidity position, with the ratio hovering around 0.75-0.93 in the subsequent quarters. This may raise concerns about the company's ability to cover its short-term liabilities.

It is important for Envestnet to monitor and manage its liquidity effectively to ensure it can meet its financial obligations as they come due. Further analysis of the composition of current assets and liabilities would provide more insights into the company's liquidity position and its ability to weather potential financial challenges.