Jabil Circuit Inc (JBL)

Quick ratio

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Cash	US$ in thousands	2,201,000	1,804,000	1,478,000	1,567,000	1,394,000
Short-term investments	US$ in thousands	27,000	25,000	16,000	18,000	16,556
Receivables	US$ in thousands	—	3,647,000	3,995,000	3,141,000	-25,800
Total current liabilities	US$ in thousands	11,782,000	12,695,000	13,697,000	10,683,000	9,059,000
Quick ratio		0.19	0.43	0.40	0.44	0.15

August 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,201,000K + $27,000K + $—K) ÷ $11,782,000K
= 0.19

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current liabilities with its most liquid assets, excluding inventory. It is calculated by dividing quick assets (cash, marketable securities, and accounts receivable) by current liabilities.

Analyzing Jabil Circuit Inc's quick ratio over the five-year period, we observe a certain degree of fluctuation. The quick ratio has ranged from a low of 0.15 in 2020 to a high of 0.44 in 2021, with the most recent value standing at 0.19 as of August 31, 2024.

A quick ratio of 0.19 as of August 31, 2024, indicates that Jabil Circuit Inc may face challenges in meeting its short-term obligations using its quick assets alone. This suggests a relatively lower level of liquidity compared to previous years.

The declining trend in the quick ratio from 2021 to 2024 raises concerns about the company's ability to cover its short-term debts without relying on inventory. Further investigation into the composition of quick assets and current liabilities is warranted to understand the underlying factors contributing to the observed decrease in the quick ratio.

It is essential for investors and stakeholders to closely monitor Jabil Circuit Inc's liquidity position, as a sustained decrease in the quick ratio could signal potential cash flow difficulties or challenges in meeting financial obligations in the short term.