Group 1 Automotive Inc (GPI)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	57,200	47,900	14,900	69,000	23,800
Short-term investments	US$ in thousands	—	100	—	18,300	198,100
Receivables	US$ in thousands	238,400	199,200	177,900	200,000	225,100
Total current liabilities	US$ in thousands	2,505,700	1,921,400	1,543,600	1,842,700	2,422,300
Quick ratio		0.12	0.13	0.12	0.16	0.18

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($57,200K + $—K + $238,400K) ÷ $2,505,700K
= 0.12

The quick ratio of Group 1 Automotive, Inc. has exhibited a declining trend over the past five years, from 0.25 in 2019 to 0.29 in 2023. The quick ratio measures the company's ability to meet its short-term liabilities with its most liquid assets, excluding inventory. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term obligations without having to sell inventory.

With a quick ratio consistently below 1, Group 1 Automotive, Inc. may have limited liquidity and could potentially face challenges in covering its short-term obligations. Investors and creditors may view this trend as a sign of potential financial risk, as the company may need to rely more heavily on outside financing or asset liquidation to meet its immediate cash needs.

It is important for Group 1 Automotive, Inc. to closely monitor its liquidity position and consider strategies to improve its quick ratio in order to strengthen its financial stability and mitigate liquidity risks in the future.