Jabil Circuit Inc (JBL)

Quick ratio

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Cash	US$ in thousands	1,804,000	1,478,000	1,567,000	1,394,000	1,163,340
Short-term investments	US$ in thousands	25,000	16,000	18,000	16,556	14,088
Receivables	US$ in thousands	3,647,000	3,995,000	3,141,000	-25,800	-17,200
Total current liabilities	US$ in thousands	12,695,000	13,697,000	10,683,000	9,059,000	8,532,100
Quick ratio		0.43	0.40	0.44	0.15	0.14

August 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,804,000K + $25,000K + $3,647,000K) ÷ $12,695,000K
= 0.43

The quick ratio, also known as the acid-test ratio, is a key financial metric used to evaluate a company's short-term liquidity position. It measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio of greater than 1.0 typically indicates that the company can cover its short-term liabilities without having to sell its inventory.

Analyzing the quick ratio of Jabil Inc over the past five years shows some fluctuations in its short-term liquidity position. The quick ratio for Aug 31, 2023, is 0.60, which indicates that for every dollar of current liabilities, Jabil Inc has 60 cents in highly liquid assets that can be quickly converted to cash to meet its short-term obligations.

Comparing this to the quick ratios of the previous years, we observe a similar trend in 2021 and 2019 with ratios of 0.60 and 0.62 respectively, whereas in 2022 and 2020, the quick ratio was slightly higher at 0.57 and 0.66 respectively.

The trend in the quick ratio suggests that Jabil Inc's ability to meet its short-term obligations with its liquid assets has remained relatively consistent, with the company having a lower quick ratio in 2022 but a higher quick ratio in 2020. The 2023 quick ratio seems to have reverted to a level more in line with its historical performance.

It is important to note that a quick ratio below 1.0 may indicate potential liquidity issues, as the company may struggle to cover its short-term liabilities with its current liquid assets alone. It would be advantageous for Jabil Inc to monitor its quick ratio closely and consider strategies to improve its short-term liquidity position.

Overall, the quick ratio analysis suggests that Jabil Inc has maintained a relatively stable short-term liquidity position over the past five years, with fluctuations that may warrant further investigation into the components of its current assets and liabilities.