Gates Industrial Corporation plc (GTES)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 682,000 720,600 578,400 658,200 521,400
Short-term investments US$ in thousands — 27,000 33,300 — —
Receivables US$ in thousands 751,300 798,600 821,600 727,200 723,600
Total current liabilities US$ in thousands 721,500 779,300 752,300 855,900 726,300
Quick ratio 1.99 1.98 1.91 1.62 1.71

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($682,000K + $—K + $751,300K) ÷ $721,500K
= 1.99

The quick ratio of Gates Industrial Corporation plc has shown a consistent upward trend from 1.71 in December 2020 to 1.99 in December 2024, indicating an improving liquidity position over the years.

A quick ratio above 1 suggests that the company has an adequate level of liquid assets to cover its short-term liabilities, with each dollar of current liabilities being backed by more than a dollar of quick assets. This indicates the company's ability to meet its short-term obligations without having to rely heavily on inventory sales or other less liquid assets.

The consistent increase in the quick ratio reflects the company's ability to maintain a healthy balance between current assets and current liabilities, providing a buffer against sudden financial pressures. Overall, the rising trend in the quick ratio suggests that Gates Industrial Corporation plc has been effectively managing its liquidity position and ensuring financial stability over the years.