FMC Corporation (FMC)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 302,400 | 572,000 | 516,800 | 568,900 | 339,100 |
| Short-term investments | US$ in thousands | — | 12,400 | 3,700 | 100 | — |
| Receivables | US$ in thousands | 2,703,200 | 2,871,400 | 2,583,700 | 2,330,300 | 2,231,200 |
| Total current liabilities | US$ in thousands | 3,384,600 | 3,799,600 | 3,520,300 | 2,829,000 | 2,723,900 |
| Quick ratio | 0.89 | 0.91 | 0.88 | 1.02 | 0.94 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($302,400K
+ $—K
+ $2,703,200K)
÷ $3,384,600K
= 0.89
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 of 1 or higher is generally considered healthy, as it indicates the company can cover its current liabilities with its quick assets.
Looking at the quick ratio of FMC Corp. over the past five years, we observe the following trend:
- In 2023, the quick ratio is 1.01, indicating that the company has just enough quick assets to cover its current liabilities. Although the ratio is slightly above 1, it suggests that FMC Corp. may have limited flexibility in meeting its short-term obligations.
- In 2022 and 2021, the quick ratios are 1.00, reflecting a stable liquidity position where the company can meet its current liabilities with its quick assets. However, having a ratio of exactly 1 may suggest the company has little room for error in meeting its short-term obligations.
- In 2020, the quick ratio is 1.16, showing an improvement in liquidity compared to the previous years. This indicates that FMC Corp. had more than enough quick assets to cover its short-term obligations, providing a comfortable margin of safety.
- In 2019, the quick ratio was 1.12, also indicating a healthy liquidity position where the company could comfortably meet its short-term obligations with its quick assets.
Overall, the quick ratio of FMC Corp. has been relatively stable over the past five years, with occasional fluctuations. While a ratio of around 1 suggests the company can meet its short-term obligations, investors and stakeholders may want to monitor any changes in the quick ratio to ensure continued liquidity and financial stability.
Peer comparison
Dec 31, 2023