Mattel Inc (MAT)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,387,910 | 1,261,360 | 761,200 | 731,400 | 762,200 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 1,315,720 | 1,342,480 | 1,187,700 | 1,598,300 | 1,355,400 |
| Quick ratio | 1.05 | 0.94 | 0.64 | 0.46 | 0.56 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,387,910K
+ $—K
+ $—K)
÷ $1,315,720K
= 1.05
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. For Mattel Inc, the quick ratio has fluctuated over the past five years.
As of December 31, 2020, the quick ratio stood at 0.56, indicating that the company had $0.56 in near-cash and highly liquid assets to cover each $1 of current liabilities. This suggests a potential liquidity concern, as the company may struggle to settle its short-term obligations without relying on inventory.
By December 31, 2021, the quick ratio decreased further to 0.46, signaling a deteriorating liquidity position. Mattel Inc might face challenges in meeting its immediate financial commitments without additional sources of liquidity.
However, the quick ratio improved significantly by December 31, 2022, reaching 0.64. This suggests a positive trend towards better liquidity management, indicating that the company may be in a stronger position to cover short-term liabilities with its liquid assets.
As of December 31, 2023, the quick ratio rose substantially to 0.94, indicating a notable enhancement in liquidity. Mattel Inc now has almost $1 in liquid assets for every $1 of current liabilities, signifying a healthier financial position in terms of short-term obligations.
By December 31, 2024, the quick ratio further improved to 1.05, surpassing the ideal threshold of 1.0. This indicates that Mattel Inc has more than enough highly liquid assets to cover its short-term liabilities comfortably, reflecting a robust liquidity position.
In conclusion, Mattel Inc's quick ratio has shown fluctuations over the analyzed period, with initial concerns about liquidity evolving into a more robust position in recent years. Investors and stakeholders should continue monitoring the company's liquidity management to understand its ability to meet short-term obligations effectively.