CarMax Inc (KMX)
Quick ratio
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 574,142 | 314,758 | 102,716 | 132,319 | 58,211 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 16,666,400 | 16,229,200 | 15,583,300 | 13,693,800 | 191,090 |
| Total current liabilities | US$ in thousands | 2,312,290 | 1,938,310 | 2,047,460 | 1,698,550 | 1,534,710 |
| Quick ratio | 7.46 | 8.54 | 7.66 | 8.14 | 0.16 |
February 29, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($574,142K
+ $—K
+ $16,666,400K)
÷ $2,312,290K
= 7.46
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 higher quick ratio indicates better liquidity and financial health.
CarMax Inc's quick ratio has shown a fluctuating trend over the past five years. The quick ratio was significantly high in 2023 at 8.54, indicating that the company had a strong ability to cover its short-term liabilities with its liquid assets. This was followed by a slight decrease in 2024 to 7.46, which is still considered a healthy level.
In contrast, there was a notable improvement in the quick ratio from 2020 to 2021, where it increased from a very low 0.16 to 8.14. This substantial increase suggests a significant enhancement in the company's liquidity position over the year.
Overall, CarMax Inc's quick ratio has generally been above 1, reflecting a comfortable liquidity position over the years analyzed. However, it is essential to assess the company's quick ratio in conjunction with other financial metrics to gain a comprehensive understanding of its financial health and liquidity management.
Peer comparison
Feb 29, 2024