FedEx Corporation (FDX)
Quick ratio
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 5,502,000 | 6,501,000 | 6,823,000 | 6,897,000 | 7,087,000 |
| Short-term investments | US$ in thousands | — | 360,000 | 302,000 | — | 24,168,000 |
| Receivables | US$ in thousands | 11,368,000 | 10,087,000 | 10,188,000 | 11,863,000 | 12,069,000 |
| Total current liabilities | US$ in thousands | 15,435,000 | 13,355,000 | 13,553,000 | 14,274,000 | 13,660,000 |
| Quick ratio | 1.09 | 1.27 | 1.28 | 1.31 | 3.17 |
May 31, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($5,502,000K
+ $—K
+ $11,368,000K)
÷ $15,435,000K
= 1.09
The analysis of FedEx Corporation's quick ratio over the period from May 31, 2021, to May 31, 2025, reveals notable trends in liquidity position.
In May 2021, the quick ratio stood at 3.17, indicating a strong liquidity position whereby the company's most liquid assets (excluding inventory) significantly exceeded its current liabilities. This suggests that FedEx was well-positioned to meet its short-term obligations without relying on the sale of inventory, reflecting ample liquid assets relative to current liabilities at that time.
By May 31, 2022, the quick ratio declined sharply to 1.31. Although still above 1.0, signifying that liquid assets remained sufficient to cover current liabilities, the substantial decrease from the prior year indicates a reduction in liquidity cushion. This decline may result from changes in the composition or level of liquid assets, an increase in current liabilities, or both.
The downward trend persisted into May 2023, with the ratio slightly decreasing to 1.28. The ratio stabilized somewhat, but the continued decline suggests ongoing pressures on liquidity. This level still indicates that the company can cover short-term obligations with liquid assets but with less margin of safety compared to the earlier period.
As of May 31, 2024, the quick ratio further declined marginally to 1.27, maintaining a similar liquidity profile as the previous year. The data indicates a continued trend of diminishing liquidity buffers over the years.
Finally, by May 31, 2025, the quick ratio decreased to 1.09. While the ratio remains above 1.0, signaling that the company's liquid assets are still sufficient to meet short-term liabilities, the narrow margin suggests a relatively tighter liquidity position. This trend over the four-year span underscores a gradual reduction in the company's liquidity buffer, which may warrant close monitoring to ensure continued financial flexibility.
Overall, the sequential decline in FedEx’s quick ratio from 3.17 in 2021 to 1.09 in 2025 indicates a contraction in liquidity reserve levels. However, despite this decrease, the company maintains a liquidity position capable of covering immediate liabilities, albeit with less comfort than in the earlier period.