LKQ Corporation (LKQ)
Current ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 4,906,000 | 4,868,000 | 4,258,000 | 4,254,370 | 4,034,030 |
| Total current liabilities | US$ in thousands | 2,862,000 | 3,318,000 | 2,271,000 | 2,165,450 | 1,988,490 |
| Current ratio | 1.71 | 1.47 | 1.87 | 1.96 | 2.03 |
December 31, 2024 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $4,906,000K ÷ $2,862,000K
= 1.71
The current ratio of LKQ Corporation has shown a gradual decline over the past five years. As of December 31, 2020, the current ratio was at a healthy level of 2.03, indicating that the company had sufficient current assets to cover its current liabilities. However, by December 31, 2024, the current ratio had decreased to 1.71, suggesting a slight deterioration in the company's liquidity position.
While a current ratio above 1 typically indicates that a company has more current assets than current liabilities, the downward trend in LKQ Corporation's current ratio may raise concerns about its ability to meet its short-term obligations. A current ratio of 1.71 as of December 31, 2024, implies that the company may have a reduced ability to cover its immediate financial obligations with its current assets.
It would be important for stakeholders to monitor this trend closely and investigate the underlying factors contributing to the decline in the current ratio to assess the company's overall liquidity and financial health.