Inter Parfums Inc (IPAR)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 125,433 88,462 104,713 159,613 169,681
Short-term investments US$ in thousands 109,311 94,304 150,833 160,014 126,627
Receivables US$ in thousands 281,133 254,943 226,544 169,799 128,678
Total current liabilities US$ in thousands 332,427 324,745 344,567 244,910 156,205
Quick ratio 1.55 1.35 1.40 2.00 2.72

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($125,433K + $109,311K + $281,133K) ÷ $332,427K
= 1.55

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. For Inter Parfums Inc, the quick ratio has been consistently above 1, indicating that the company has been able to cover its current liabilities with its quick assets.

Looking at the trend over the past five years, the quick ratio has experienced a slight decrease from 2.72 in December 2020 to 1.55 in December 2024. Despite this decline, the quick ratio remains above the critical threshold of 1, suggesting that Inter Parfums Inc has maintained a strong liquidity position.

However, the decreasing trend in the quick ratio from 2020 to 2024 may raise concerns about the company's ability to cover its short-term obligations with its liquid assets in the future. It is important for stakeholders to monitor this ratio closely to ensure that Inter Parfums Inc continues to manage its liquidity effectively.