CarMax Inc (KMX)

Current ratio

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Total current assets	US$ in thousands	5,226,590	5,109,950	5,386,370	5,363,670	5,041,370	4,984,020	5,872,460	6,117,970	6,549,290	5,955,070	5,371,300	4,690,600	4,116,800	3,737,100	4,327,860	3,283,730	3,663,690	3,450,240	3,384,940	3,283,740
Total current liabilities	US$ in thousands	2,312,290	2,083,240	2,320,390	2,113,970	1,938,310	1,937,050	2,132,190	2,251,750	2,047,460	2,056,850	1,958,960	2,093,390	1,698,550	1,437,790	1,598,940	1,151,010	1,534,710	1,421,040	1,396,700	1,485,400
Current ratio		2.26	2.45	2.32	2.54	2.60	2.57	2.75	2.72	3.20	2.90	2.74	2.24	2.42	2.60	2.71	2.85	2.39	2.43	2.42	2.21

February 29, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $5,226,590K ÷ $2,312,290K
= 2.26

CarMax Inc's current ratio has exhibited fluctuations over the past several quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has ranged from a low of 2.21 to a high of 3.20 during the periods observed.

The current ratio increased steadily from May 2019 to May 2022, reaching a peak of 3.20. This upward trend indicates that CarMax Inc had improved liquidity and a stronger ability to meet its short-term obligations during this period. However, the current ratio declined in the subsequent quarters, falling to 2.21 by November 2022, before recovering to 2.54 in May 2023.

While the current ratio may fluctuate for various reasons such as changes in the company's assets or liabilities, a ratio above 1 generally indicates that a company has more current assets than current liabilities. CarMax Inc's current ratios above 2 in most periods suggest that the company has a comfortable buffer to cover its short-term obligations.

It is essential for stakeholders to monitor CarMax Inc's current ratio over time to assess its liquidity position and ability to meet its short-term financial obligations.