The Gap, Inc. (GAP)
Quick ratio
| Aug 3, 2024 | May 4, 2024 | Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,900,000 | 1,532,000 | 1,873,000 | 1,351,000 | 1,350,000 | 1,170,000 | 1,215,000 | 679,000 | 708,000 | 845,000 | 877,000 | 801,000 | 2,375,000 | 2,066,000 | 1,988,000 | 2,471,000 | 2,188,000 | 1,028,000 | 1,364,000 | 788,000 |
| Short-term investments | US$ in thousands | 246,000 | 199,000 | 0 | 1,000 | 0 | 0 | 15,000 | 0 | 0 | 0 | 0 | 275,000 | 337,000 | 475,000 | 410,000 | 178,000 | 25,000 | 51,000 | 290,000 | 294,000 |
| Receivables | US$ in thousands | — | — | 289,000 | — | — | — | 340,000 | — | — | — | 399,000 | — | — | — | 363,000 | — | — | — | 316,000 | — |
| Total current liabilities | US$ in thousands | 3,224,000 | 2,806,000 | 3,096,000 | 3,139,000 | 3,007,000 | 2,918,000 | 3,256,000 | 3,381,000 | 3,614,000 | 3,472,000 | 4,077,000 | 3,823,000 | 3,651,000 | 3,638,000 | 3,884,000 | 4,431,000 | 3,649,000 | 3,431,000 | 3,209,000 | 3,192,000 |
| Quick ratio | 0.67 | 0.62 | 0.70 | 0.43 | 0.45 | 0.40 | 0.48 | 0.20 | 0.20 | 0.24 | 0.31 | 0.28 | 0.74 | 0.70 | 0.71 | 0.60 | 0.61 | 0.31 | 0.61 | 0.34 |
August 3, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,900,000K
+ $246,000K
+ $—K)
÷ $3,224,000K
= 0.67
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 below 1 indicates that a company may not be able to cover its short-term liabilities with its current assets if they were due immediately.
Analyzing The Gap, Inc.'s quick ratio over the past 20 quarters shows some fluctuations. The quick ratio ranged from a low of 0.20 to a high of 0.74 during this period. In general, the quick ratio has been somewhat volatile, with fluctuations above and below the ideal ratio of 1.
The trend in The Gap, Inc.'s quick ratio indicates varying levels of liquidity over time. In recent quarters, the quick ratio has been below 1, which may raise concerns about the company's ability to quickly cover its short-term obligations with its current assets. Specifically, the quick ratio was below 0.5 in many quarters, indicating a potential liquidity challenge.
Overall, the trend in The Gap, Inc.'s quick ratio suggests that the company may need to improve its liquidity position to ensure it can meet its short-term obligations efficiently. Further analysis of the components of current assets and liabilities contributing to the quick ratio would provide additional insights into the company's liquidity management.
Peer comparison
Aug 3, 2024