Matthews International Corporation (MATW)
Quick ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 40,816 | 42,101 | 69,016 | 49,176 | 41,334 |
| Short-term investments | US$ in thousands | — | 920 | 3,358 | 31 | — |
| Receivables | US$ in thousands | 205,984 | 207,526 | 221,015 | 309,818 | 295,185 |
| Total current liabilities | US$ in thousands | 434,775 | 394,600 | 411,375 | 354,225 | 316,868 |
| Quick ratio | 0.57 | 0.63 | 0.71 | 1.01 | 1.06 |
September 30, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($40,816K
+ $—K
+ $205,984K)
÷ $434,775K
= 0.57
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates that the company may have difficulty in covering its current liabilities with its quick assets.
Looking at the trend in Matthews International Corporation's quick ratio over the past five years, it has been declining steadily, from 1.06 in 2020 to 0.57 in 2024. This downward trend suggests a potential deterioration in the company's liquidity position and ability to meet its short-term obligations promptly.
A quick ratio of 0.57 in 2024 indicates that for every dollar of current liabilities, the company has $0.57 of quick assets available to cover these obligations. This could be a cause for concern as it suggests a reduced ability to pay off short-term debts without relying on selling off inventory or other assets.
Overall, a declining quick ratio for Matthews International Corporation raises red flags regarding its liquidity management and the need to closely monitor its ability to meet short-term obligations in the future.