FedEx Corporation (FDX)
Quick ratio
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 6,501,000 | 6,856,000 | 6,897,000 | 7,087,000 | 4,881,000 |
| Short-term investments | US$ in thousands | — | — | — | 24,168,000 | — |
| Receivables | US$ in thousands | 10,087,000 | 10,188,000 | 11,863,000 | 12,069,000 | 10,102,000 |
| Total current liabilities | US$ in thousands | 13,355,000 | 13,586,000 | 14,274,000 | 13,660,000 | 10,344,000 |
| Quick ratio | 1.24 | 1.25 | 1.31 | 3.17 | 1.45 |
May 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($6,501,000K
+ $—K
+ $10,087,000K)
÷ $13,355,000K
= 1.24
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. A quick ratio above 1 indicates that a company can cover its current liabilities with its quick assets.
For FedEx Corporation, the quick ratio has shown some fluctuation over the past five years. In May 2024, the quick ratio was 1.24, slightly lower than the previous year's ratio of 1.25. This slight decrease may indicate a minor decrease in FedEx's ability to cover its short-term obligations with its quick assets.
Comparing to the quick ratio in May 2022 and May 2023, which were 1.31 and 3.17 respectively, the current ratio has decreased, indicating a potential decline in liquidity compared to those years. However, the quick ratio in May 2024 is still above 1, suggesting that FedEx's current assets can cover its short-term liabilities.
It is essential to monitor the trend of the quick ratio over time to assess the company's liquidity position accurately. Overall, while there has been a slight decline in the quick ratio for FedEx Corporation in 2024, the company still appears to have adequate liquidity to meet its short-term obligations.