WW Grainger Inc (GWW)
Quick ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 660,000 | 601,000 | 515,000 | 461,000 | 325,000 | 315,000 | 262,000 | 364,000 | 241,000 | 328,000 | 547,000 | 562,000 | 585,000 | 859,000 | 1,603,000 | 1,492,000 | 360,000 | 286,000 | 315,000 | 392,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Receivables | US$ in thousands | 2,192,000 | 2,444,000 | 2,418,000 | 2,294,000 | 2,133,000 | 2,158,000 | 2,099,000 | 2,001,000 | 1,754,000 | 1,742,000 | 1,634,000 | 1,576,000 | 1,474,000 | 1,485,000 | 1,460,000 | 1,613,000 | 1,425,000 | 1,495,000 | 1,503,000 | 1,485,000 |
| Total current liabilities | US$ in thousands | 1,831,000 | 1,898,000 | 1,920,000 | 1,924,000 | 2,010,000 | 1,785,000 | 1,750,000 | 1,742,000 | 1,528,000 | 1,550,000 | 1,589,000 | 1,531,000 | 1,441,000 | 1,441,000 | 1,388,000 | 1,500,000 | 1,678,000 | 1,572,000 | 1,452,000 | 1,462,000 |
| Quick ratio | 1.56 | 1.60 | 1.53 | 1.43 | 1.22 | 1.39 | 1.35 | 1.36 | 1.31 | 1.34 | 1.37 | 1.40 | 1.43 | 1.63 | 2.21 | 2.07 | 1.06 | 1.13 | 1.25 | 1.28 |
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 measures a company's ability to cover its short-term liabilities with its most liquid assets. A higher quick ratio indicates a stronger ability to meet short-term obligations without relying extensively on inventory.
In the case of W.W. Grainger Inc., the quick ratio has shown some fluctuations over the past eight quarters. It ranged from a low of 1.36 in Q4 2022 to a high of 1.69 in Q3 2023. Generally, the company has maintained a quick ratio above 1, indicating that it has sufficient liquid assets to cover its current liabilities.
The increasing trend in the quick ratio from Q4 2022 to Q3 2023 suggests an improvement in the company's short-term liquidity position. This could be attributed to more effective management of current assets and liabilities during this period.
However, investors and analysts should exercise caution when relying solely on the quick ratio as it doesn't consider inventory in the calculation. It's essential to consider other financial ratios and qualitative factors to assess W.W. Grainger Inc.'s overall financial health comprehensively.