Genuine Parts Co (GPC)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,102,010 | 653,463 | 714,701 | 990,166 | 276,992 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 2,223,430 | 2,188,870 | 1,797,960 | 1,556,970 | 2,635,160 |
| Total current liabilities | US$ in thousands | 7,827,110 | 7,686,110 | 6,581,580 | 5,894,080 | 6,394,120 |
| Quick ratio | 0.42 | 0.37 | 0.38 | 0.43 | 0.46 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,102,010K
+ $—K
+ $2,223,430K)
÷ $7,827,110K
= 0.42
The quick ratio of Genuine Parts Co. has exhibited a slight fluctuation over the past five years, ranging from 0.57 to 0.64. This ratio indicates the company's ability to meet its short-term obligations with its most liquid assets excluding inventory.
The quick ratio of Genuine Parts Co. has shown a decline in recent years, dropping from 0.64 in 2019 to 0.63 in 2023. This decrease may raise concerns about the company's liquidity position and its ability to cover immediate liabilities without relying on inventory sales.
Although the quick ratio is below the ideal benchmark of 1, indicating a potential liquidity risk, it is essential to consider industry norms and the company's specific operational requirements when assessing the significance of this ratio. A trend analysis over multiple years can provide valuable insights into the company's liquidity management and financial health.