Frontdoor Inc (FTDR)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 325,000 | 292,000 | 262,000 | 597,000 | 428,000 |
| Short-term investments | US$ in thousands | — | 6,000 | — | — | 7,000 |
| Receivables | US$ in thousands | 6,000 | 5,000 | 7,000 | 5,000 | 11,000 |
| Total current liabilities | US$ in thousands | 331,000 | 364,000 | 378,000 | 403,000 | 364,000 |
| Quick ratio | 1.00 | 0.83 | 0.71 | 1.49 | 1.23 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($325,000K
+ $—K
+ $6,000K)
÷ $331,000K
= 1.00
The quick ratio of Frontdoor Inc. has fluctuated over the past five years, indicating varying levels of the company's ability to meet its short-term obligations with its most liquid assets.
In 2023, the quick ratio of 1.10 suggests that Frontdoor Inc. has $1.10 in readily available assets to cover every $1 of current liabilities. This indicates an improvement from the previous year, where the quick ratio was 0.91, reflecting a stronger liquidity position.
Looking back at 2021 and 2020, the quick ratios were 0.78 and 1.55 respectively. A quick ratio below 1 in 2021 indicated potential difficulties in meeting short-term obligations with liquid assets alone. However, the significant improvement in 2020 to a ratio of 1.55 indicated a more comfortable liquidity position at that time.
In 2019, the quick ratio was 1.27, suggesting that Frontdoor Inc. had $1.27 in quick assets to cover each dollar of current liabilities. This implied a relatively healthy liquidity position, although slightly lower than the ratio seen in 2020.
Overall, Frontdoor Inc.'s quick ratio has shown variability over the years, with fluctuations reflecting changes in the company's ability to quickly meet its short-term financial obligations using its liquid assets. It is important for stakeholders to monitor this ratio to assess the company's liquidity risk and financial health.
Peer comparison
Dec 31, 2023