CarMax Inc (KMX)

Quick 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
Cash	US$ in thousands	574,142	605,375	521,098	264,247	314,758	688,618	56,772	95,313	102,716	62,598	58,095	377,954	132,319	236,643	711,561	658,022	58,211	56,583	40,737	42,197
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Receivables	US$ in thousands	16,666,400	16,700,100	16,764,800	16,626,700	16,229,200	16,067,700	15,993,300	16,010,300	15,583,300	15,492,700	15,093,500	14,575,800	13,693,800	13,405,300	13,232,000	12,990,200	191,090	174,937	173,291	159,579
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
Quick ratio		7.46	8.31	7.45	7.99	8.54	8.65	7.53	7.15	7.66	7.56	7.73	7.14	8.14	9.49	8.72	11.86	0.16	0.16	0.15	0.14

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 of CarMax Inc has shown consistency and strength over the past few quarters, with a range between 7.14 and 9.49. This indicates that the company has a healthy ability to meet its short-term obligations using its most liquid assets.

In particular, the quick ratio has been above 1 (considered optimal) in all periods except for the last two quarters of FY2020, where it dropped significantly to 0.16. This could indicate potential liquidity issues during that time frame.

Overall, the trend in the quick ratio for CarMax Inc suggests that the company has generally maintained a strong liquidity position and a prudent approach to managing its short-term obligations. It is essential to monitor future trends in the quick ratio to assess the company's ability to meet its short-term financial obligations effectively.