The Gap, Inc. (GAP)
Quick ratio
| Feb 1, 2025 | Nov 2, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 2,335,000 | 1,969,000 | 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 |
| Short-term investments | US$ in thousands | 253,000 | 250,000 | 246,000 | 199,000 | 0 | 0 | 0 | 0 | 15,000 | 0 | 0 | 0 | 0 | 275,000 | 337,000 | 475,000 | 410,000 | 178,000 | 25,000 | 51,000 |
| Receivables | US$ in thousands | 301,000 | — | — | — | 289,000 | — | — | — | 340,000 | — | — | — | 399,000 | — | — | — | 363,000 | — | — | — |
| Total current liabilities | US$ in thousands | 3,256,000 | 3,325,000 | 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 |
| Quick ratio | 0.89 | 0.67 | 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 |
February 1, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,335,000K
+ $253,000K
+ $301,000K)
÷ $3,256,000K
= 0.89
The quick ratio of The Gap, Inc. has shown fluctuations over the past few quarters, ranging from a low of 0.20 to a high of 0.89. 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 in meeting its short-term liabilities using only its liquid assets.
Based on the given data, The Gap, Inc. experienced a significant decrease in its quick ratio from October 30, 2021, to April 30, 2022, reaching a low of 0.24, which implies a potential liquidity stress during that period. However, the quick ratio improved in the following quarters, with a notable increase in the ratio to 0.70 by February 3, 2024.
The company's quick ratio remained relatively stable around 0.60 to 0.70 in the most recent periods, indicating a reasonable ability to cover its short-term obligations with liquid assets. The improvement in the quick ratio towards the later quarters suggests better liquidity management and a stronger financial position for The Gap, Inc.
Peer comparison
Feb 1, 2025