Federal Signal Corporation (FSS)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	91,100	61,000	47,500	40,500	81,700
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	241,800	195,800	180,500	170,400	148,400
Quick ratio		0.38	0.31	0.26	0.24	0.55

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($91,100K + $—K + $—K) ÷ $241,800K
= 0.38

The quick ratio of Federal Signal Corporation has shown a declining trend over the past five years, dropping from 0.55 in December 31, 2020, to 0.24 in December 31, 2021, and further decreasing to 0.26 in December 31, 2022. However, there was a slight improvement in the quick ratio to 0.31 in December 31, 2023, and further improvement to 0.38 in December 31, 2024.

The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities with its quick assets alone. In this case, the company's quick ratio has been generally below 1 in the recent years, signaling potential liquidity challenges.

It is important for Federal Signal Corporation to monitor and improve its quick ratio to ensure it has an adequate cushion of liquid assets to meet its short-term obligations and weather any financial uncertainties. Further analysis of the company's asset composition and review of its liquidity management practices may be necessary to address the declining trend in the quick ratio.