HealthEquity Inc (HQY)

Quick ratio

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Cash	US$ in thousands	403,979	254,266	225,414	328,803	191,726
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	104,893	96,835	87,428	72,767	70,863
Total current liabilities	US$ in thousands	117,091	131,061	153,187	204,701	151,937
Quick ratio		4.35	2.68	2.04	1.96	1.73

January 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($403,979K + $—K + $104,893K) ÷ $117,091K
= 4.35

The quick ratio of HealthEquity Inc has generally been improving over the past five years, indicating a strengthening ability to cover its short-term liabilities with its most liquid assets. As of January 31, 2024, the quick ratio stands at an impressive 4.35, a significant increase from 2.68 in the previous year and a substantial improvement compared to the ratios in the prior years.

This upward trend suggests that HealthEquity Inc has a solid liquidity position, with a higher proportion of highly liquid assets relative to its current liabilities. The quick ratio exceeding 1.0 in each year indicates that the company has an adequate level of quick assets to meet its short-term obligations without relying heavily on inventory or other less liquid assets.

The continued improvement in the quick ratio reflects positively on the company's financial health and its ability to manage short-term financial commitments effectively. This trend is likely to be viewed favorably by investors, creditors, and other stakeholders concerned about the firm's liquidity and ability to weather short-term financial challenges.