KBR Inc (KBR)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 304,000 | 389,000 | 370,000 | 436,000 | 712,000 |
| Short-term investments | US$ in thousands | — | — | 2,000 | — | — |
| Receivables | US$ in thousands | 1,014,000 | 966,000 | 1,432,000 | 921,000 | 975,000 |
| Total current liabilities | US$ in thousands | 1,572,000 | 1,821,000 | 1,875,000 | 1,455,000 | 1,501,000 |
| Quick ratio | 0.84 | 0.74 | 0.96 | 0.93 | 1.12 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($304,000K
+ $—K
+ $1,014,000K)
÷ $1,572,000K
= 0.84
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. A quick ratio below 1 indicates that a company may have difficulty meeting its short-term liabilities.
Analyzing KBR Inc's quick ratio over the past five years, we observe a downward trend from 2019 to 2022, with the ratio decreasing from 1.12 to 0.74. This indicates a potential weakening of KBR Inc's ability to cover its short-term obligations with its quick assets during these years. However, in 2023, the quick ratio slightly improved to 0.84, although it still remains below 1.
While a quick ratio below 1 may raise concerns about liquidity risk, it is important to consider industry norms and the company's specific circumstances. Investors and stakeholders should monitor KBR Inc's liquidity position closely to ensure that the company can meet its short-term financial obligations.
Peer comparison
Dec 31, 2023