Masco Corporation (MAS)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 634,000 | 452,000 | 926,000 | 1,326,000 | 697,000 |
| Short-term investments | US$ in thousands | — | 452,000 | 926,000 | 1,326,000 | — |
| Receivables | US$ in thousands | 1,090,000 | 1,149,000 | 1,171,000 | 1,138,000 | 997,000 |
| Total current liabilities | US$ in thousands | 1,695,000 | 1,889,000 | 1,939,000 | 1,934,000 | 1,548,000 |
| Quick ratio | 1.02 | 1.09 | 1.56 | 1.96 | 1.09 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($634,000K
+ $—K
+ $1,090,000K)
÷ $1,695,000K
= 1.02
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. Masco Corp.'s quick ratio has fluctuated over the past five years. In 2023, the quick ratio is at 1.08, indicating that the company has $1.08 in liquid assets available to cover each $1 of its current liabilities.
Comparing this to the prior years, we see a declining trend in the quick ratio from 1.14 in 2021 to 0.91 in 2022, before recovering slightly in 2023. A quick ratio below 1 can suggest potential liquidity issues, as the company may struggle to meet its short-term obligations without relying on inventory or other less liquid assets.
However, it is important to consider the industry standards and the company's individual circumstances when evaluating the quick ratio. A quick ratio of around 1.08 indicates that Masco Corp. may still be able to meet its short-term liabilities, but management should continue to monitor liquidity levels to ensure financial stability in the future.
Peer comparison
Dec 31, 2023