Helen of Troy Ltd (HELE)
Quick ratio
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 18,501 | 29,073 | 33,381 | 45,120 | 24,467 |
| Short-term investments | US$ in thousands | — | 3,941 | — | — | — |
| Receivables | US$ in thousands | 394,536 | 377,604 | 457,623 | 382,449 | 348,023 |
| Total current liabilities | US$ in thousands | 450,811 | 412,158 | 602,690 | 614,892 | 338,896 |
| Quick ratio | 0.92 | 1.00 | 0.81 | 0.70 | 1.10 |
February 29, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($18,501K
+ $—K
+ $394,536K)
÷ $450,811K
= 0.92
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of less than 1 indicates that a company may have difficulty meeting its short-term liabilities if they all came due at once.
Based on the data provided, Helen of Troy Ltd's quick ratio has fluctuated over the past five years. In 2024, the quick ratio stands at 0.92, indicating that the company has $0.92 of liquid assets available to cover each dollar of current liabilities. This suggests a moderate level of liquidity to cover short-term obligations.
Comparing this to the previous years, the quick ratio was at its highest in 2020 at 1.10, indicating a stronger ability to meet short-term liabilities quickly. However, in 2022, the quick ratio dropped to 0.81, signaling a potential strain on the company's ability to meet short-term obligations.
Overall, while the current quick ratio of 0.92 indicates that Helen of Troy Ltd's liquidity position has improved compared to the previous year, it is below the ideal ratio of 1. This suggests that the company may need to carefully manage its liquidity to ensure it can meet its short-term obligations efficiently.