The Gap, Inc. (GAP)

Quick ratio

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Cash US$ in thousands 1,873,000 1,215,000 877,000 1,988,000 1,364,000
Short-term investments US$ in thousands 0 15,000 0 410,000 290,000
Receivables US$ in thousands 289,000 340,000 399,000 363,000 316,000
Total current liabilities US$ in thousands 3,096,000 3,256,000 4,077,000 3,884,000 3,209,000
Quick ratio 0.70 0.48 0.31 0.71 0.61

February 3, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,873,000K + $0K + $289,000K) ÷ $3,096,000K
= 0.70

The quick ratio of The Gap, Inc. has fluctuated over the past five years. In the most recent fiscal year ending February 3, 2024, the quick ratio stood at 0.70. This indicates that for every dollar of current liabilities, the company had $0.70 in quick assets that could be readily converted into cash to cover its short-term obligations. The quick ratio has improved from the previous year when it was 0.48, suggesting better liquidity in the current year.

Comparing the quick ratio to two years ago, it shows a significant increase from 0.31 to 0.70, which indicates a stronger ability to meet short-term obligations using liquid assets. However, looking back three years ago, the quick ratio was 0.71, slightly higher than the current year's ratio, indicating a potential dip in liquidity.

In the context of the five-year trend, fluctuations in the quick ratio demonstrate changes in The Gap, Inc.'s ability to cover its short-term liabilities with its quick assets. It is important for the company to maintain a healthy quick ratio to ensure sufficient liquidity to meet its short-term obligations.


Peer comparison

Feb 3, 2024