International Paper (IP)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 950,000 | 804,000 | 1,295,000 | 595,000 | 511,000 |
| Short-term investments | US$ in thousands | 163,000 | 804,000 | 245,000 | 4,850,000 | — |
| Receivables | US$ in thousands | 3,059,000 | 3,284,000 | 3,232,000 | 3,064,000 | 3,280,000 |
| Total current liabilities | US$ in thousands | 3,959,000 | 5,000,000 | 4,144,000 | 8,284,000 | 8,646,000 |
| Quick ratio | 1.05 | 0.98 | 1.15 | 1.03 | 0.44 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($950,000K
+ $163,000K
+ $3,059,000K)
÷ $3,959,000K
= 1.05
The quick ratio of International Paper Co. has shown fluctuations over the past five years. In 2019, the quick ratio was relatively low at 0.51, indicating a potential liquidity risk as current assets may not be sufficient to cover current liabilities in the short term. However, the company improved its quick ratio significantly in 2021 to 1.27, suggesting a stronger ability to meet short-term obligations with liquid assets.
In 2022, there was a decline in the quick ratio to 0.94, indicating a slight weakening in the company's liquidity position. However, International Paper Co. managed to increase its quick ratio again in 2023 to 1.19, although it remains below the peak level seen in 2021.
Overall, the trend in International Paper Co.'s quick ratio indicates some variability in its liquidity position over the years, with efforts to strengthen liquidity evident in certain periods. It is important for the company to maintain a healthy quick ratio to ensure it can cover its short-term liabilities effectively.
Peer comparison
Dec 31, 2023