Lululemon Athletica Inc. (LULU)

Quick ratio

		Jan 31, 2025	Jan 31, 2024	Jan 28, 2024	Jan 31, 2023	Jan 29, 2023
Cash	US$ in thousands	1,984,340	2,243,960	2,243,970	1,154,870	1,154,870
Short-term investments	US$ in thousands	—	8	8	8	8
Receivables	US$ in thousands	—	—	124,769	—	132,906
Total current liabilities	US$ in thousands	2,030,320	1,631,260	1,631,260	1,492,200	1,492,200
Quick ratio		0.98	1.38	1.45	0.77	0.86

January 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,984,340K + $—K + $—K) ÷ $2,030,320K
= 0.98

The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of less than 1 may indicate potential liquidity issues, as it suggests the company may not be able to cover its current liabilities with its current assets that can be quickly converted into cash.

Looking at the quick ratio trend of Lululemon Athletica Inc., we observe fluctuations over the years. As of January 29, 2023, the quick ratio stood at 0.86, indicating a slightly concerning level of liquidity. However, the ratio improved to 1.45 on January 28, 2024, reflecting a healthier position where current assets were more than enough to cover current liabilities.

Nevertheless, by January 31, 2025, the quick ratio dropped to 0.98, which suggests that the company may have faced challenges in meeting its short-term obligations with its readily available assets. It is important for stakeholders to monitor this ratio closely to assess Lululemon's ability to manage its short-term liquidity effectively.