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.
Peer comparison
Dec 31, 2023