Graco Inc (GGG)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 675,336 537,951 339,196 624,302 378,909
Short-term investments US$ in thousands — — — — —
Receivables US$ in thousands — — — — —
Total current liabilities US$ in thousands 405,808 395,200 399,917 506,792 321,389
Quick ratio 1.66 1.36 0.85 1.23 1.18

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($675,336K + $—K + $—K) ÷ $405,808K
= 1.66

The quick ratio of Graco Inc has shown fluctuations over the past five years. As of December 31, 2020, the quick ratio was 1.18, indicating that the company had $1.18 in liquid assets available to cover each dollar of current liabilities. By the end of 2021, the quick ratio improved slightly to 1.23, suggesting a strengthened liquidity position.

However, by December 31, 2022, the quick ratio decreased to 0.85, signaling a potential liquidity strain as the company might have had insufficient liquid assets to cover its short-term obligations. This decline could raise concerns about Graco Inc's ability to meet its current liabilities promptly.

In the subsequent years, the quick ratio rebounded significantly. By the end of 2023, the quick ratio improved notably to 1.36, reflecting enhanced liquidity and a more favorable liquidity position. Moreover, as of December 31, 2024, the quick ratio surged to 1.66, indicating a robust liquidity position with $1.66 in liquid assets available for each dollar of current liabilities.

Overall, the fluctuation in Graco Inc's quick ratio over the years highlights the importance of monitoring liquidity levels to ensure the company's ability to meet its short-term obligations efficiently. A higher quick ratio is generally preferred as it signifies a stronger liquidity position and better ability to weather potential financial challenges.