Frontdoor Inc (FTDR)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 421,000 | 325,000 | 292,000 | 262,000 | 597,000 |
| Short-term investments | US$ in thousands | 15,000 | 5,000 | 6,000 | — | 0 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 369,000 | 331,000 | 364,000 | 378,000 | 403,000 |
| Quick ratio | 1.18 | 1.00 | 0.82 | 0.69 | 1.48 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($421,000K
+ $15,000K
+ $—K)
÷ $369,000K
= 1.18
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For Frontdoor Inc, the quick ratio has shown fluctuations over the past five years. In December 2020, the quick ratio was 1.48, indicating that the company had $1.48 in liquid assets for every dollar of current liabilities. However, by December 2021, the quick ratio had decreased to 0.69, suggesting a potential liquidity strain as the company had only $0.69 in liquid assets for every dollar of current liabilities.
Subsequently, there was an improvement in the quick ratio to 0.82 by December 2022, but it still remained below the ideal threshold of 1. This indicates that Frontdoor Inc may have faced challenges in meeting its short-term obligations with liquid assets during this period.
The quick ratio further improved to 1.00 by December 2023, reaching the ideal threshold of 1, which implies the company had exactly enough liquid assets to cover its current liabilities. By December 2024, the quick ratio increased to 1.18, indicating an even stronger liquidity position as the company had $1.18 in liquid assets for every dollar of current liabilities.
Overall, the trend in Frontdoor Inc's quick ratio shows variability, with a significant improvement in liquidity from 2021 to 2024, ultimately reaching a comfortable position of exceeding the ideal threshold of 1 in the most recent year evaluated.
Peer comparison
Dec 31, 2024