KAR Auction Services Inc (KAR)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	93,500	225,700	177,600	752,100	507,600
Short-term investments	US$ in thousands	0	300	7,500	—	—
Receivables	US$ in thousands	2,573,800	2,665,800	3,033,000	2,256,200	2,557,700
Total current liabilities	US$ in thousands	2,478,800	2,643,200	3,009,300	2,250,600	2,517,700
Quick ratio		1.08	1.09	1.07	1.34	1.22

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($93,500K + $0K + $2,573,800K) ÷ $2,478,800K
= 1.08

The quick ratio of Openlane Inc. has shown a decreasing trend over the past five years, from 0.43 in 2019 to 0.20 in 2023. This may indicate a potential liquidity concern as the company's ability to cover its short-term obligations with its most liquid assets has weakened.

A quick ratio below 1.0 suggests that the company may have difficulty meeting its short-term liabilities with its current quick assets. The significant drop in the quick ratio from 2022 (0.22) to 2023 (0.20) raises concerns about the company's ability to meet its short-term obligations promptly.

Further investigation into the company's quick assets, such as cash, marketable securities, and accounts receivable, may be necessary to determine the reasons behind the declining trend in the quick ratio. It is essential for investors and stakeholders to monitor this metric closely as it provides insights into the company's short-term liquidity position and financial health.