Kroger Company (KR)

Quick ratio

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Cash US$ in thousands 1,883,000 1,015,000 1,821,000 1,687,000 399,000
Short-term investments US$ in thousands
Receivables US$ in thousands 2,136,000 2,234,000 1,828,000 1,781,000 1,706,000
Total current liabilities US$ in thousands 16,058,000 17,238,000 16,323,000 15,366,000 14,243,000
Quick ratio 0.25 0.19 0.22 0.23 0.15

February 3, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,883,000K + $—K + $2,136,000K) ÷ $16,058,000K
= 0.25

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio below 1 indicates that a company may struggle to meet its short-term liabilities with its current assets.

Analyzing Kroger Company's quick ratio over the past five years, we can observe fluctuations in the ratio. In fiscal year 2024, the quick ratio improved to 0.25 from 0.19 in the previous year. This indicates that Kroger had a higher proportion of liquid assets relative to its current liabilities, enhancing its ability to cover short-term obligations.

Comparing this improvement to the quick ratios of the preceding years, we note that in fiscal years 2022 and 2023, the quick ratio was 0.22 and 0.19, respectively, suggesting a relative decrease in liquidity compared to the most recent year. However, in fiscal years 2021 and 2020, the quick ratio was slightly higher at 0.23 and 0.15, respectively.

The upward trend in the quick ratio from 2020 to 2024 signals an enhancement in Kroger's liquidity position over the years. This improvement may be attributed to better management of current assets that can be readily converted into cash to meet short-term obligations. However, it is essential to monitor this ratio continuously to ensure Kroger maintains a healthy liquidity position and can effectively manage its short-term financial obligations.


Peer comparison

Feb 3, 2024

Company name
Symbol
Quick ratio
Kroger Company
KR
0.25
Grocery Outlet Holding Corp
GO
0.35
Sprouts Farmers Market LLC
SFM
0.42