WW Grainger Inc (GWW)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 660,000 | 325,000 | 241,000 | 585,000 | 360,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 2,192,000 | 2,133,000 | 1,754,000 | 1,474,000 | 1,425,000 |
| Total current liabilities | US$ in thousands | 1,831,000 | 2,010,000 | 1,528,000 | 1,441,000 | 1,678,000 |
| Quick ratio | 1.56 | 1.22 | 1.31 | 1.43 | 1.06 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($660,000K
+ $—K
+ $2,192,000K)
÷ $1,831,000K
= 1.56
The quick ratio of W.W. Grainger Inc. for the past five years demonstrates the company's ability to meet its short-term financial obligations with its most liquid assets. The quick ratio has shown a generally positive trend over the period, improving from 1.13 in 2019 to 1.64 in 2023.
A quick ratio above 1 indicates that the company has an adequate level of liquid assets to cover its current liabilities, which is a positive sign. The gradual increase in the quick ratio suggests an improvement in the company's liquidity position over the years.
The quick ratio of W.W. Grainger Inc. was relatively stable between 2020 and 2022, ranging from 1.36 to 1.52, indicating consistent liquidity management during those years. However, the significant increase to 1.64 in 2023 indicates a strengthened ability to cover short-term obligations with liquid assets.
Overall, W.W. Grainger Inc.'s increasing quick ratio reflects a favorable liquidity position and suggests that the company is efficiently managing its short-term financial needs over the period under consideration.