Lear Corporation (LEA)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	1,196,300	1,114,900	1,318,300	1,306,700	1,487,700
Short-term investments	US$ in thousands	4,800	3,600	3,500	9,300	17,100
Receivables	US$ in thousands	3,681,200	3,451,900	3,041,500	3,269,200	2,982,600
Total current liabilities	US$ in thousands	5,667,200	5,188,300	4,759,900	5,076,700	4,666,200
Quick ratio		0.86	0.88	0.92	0.90	0.96

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,196,300K + $4,800K + $3,681,200K) ÷ $5,667,200K
= 0.86

The quick ratio of Lear Corp. has been relatively stable over the past five years, ranging from 1.04 to 1.10. This indicates that the company has a healthy level of short-term liquidity to cover its immediate liabilities with its most liquid assets. A quick ratio of above 1 suggests that Lear Corp. has an adequate level of current assets, excluding inventory, to meet its short-term obligations.

The slight fluctuations in the quick ratio over the years may be attributed to changes in the composition of current assets and liabilities. A consistent quick ratio above 1 signifies that Lear Corp. is financially capable of meeting its short-term obligations without relying heavily on selling off its inventory.

Overall, the stability of Lear Corp.'s quick ratio indicates a sound financial position in terms of short-term liquidity management. However, it is advisable for the company to continue monitoring and managing its liquidity position to ensure ongoing financial health and sustainability.