Mercer International Inc (MERC)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 313,992 | 354,032 | 345,610 | 361,098 | 351,085 |
| Short-term investments | US$ in thousands | — | — | — | 46,429 | — |
| Receivables | US$ in thousands | 306,166 | 351,993 | 383,298 | 227,055 | 208,740 |
| Total current liabilities | US$ in thousands | 286,437 | 378,061 | 283,124 | 211,796 | 256,312 |
| Quick ratio | 2.17 | 1.87 | 2.57 | 3.00 | 2.18 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($313,992K
+ $—K
+ $306,166K)
÷ $286,437K
= 2.17
The quick ratio of Mercer International Inc. has exhibited some fluctuations over the past five years. In 2023, the quick ratio stands at 2.25, indicating that the company had $2.25 of liquid assets available to cover each dollar of current liabilities. This represents an increase compared to the previous year when the quick ratio was 1.92.
The quick ratio has shown a general trend of staying above 2, which suggests that Mercer International Inc. has maintained a strong liquidity position over the years, with a comfortable ability to meet its short-term obligations using its most liquid assets. A quick ratio above 1 typically indicates that the company can readily cover its short-term liabilities without relying heavily on inventory sales.
Although the quick ratio decreased from 2.85 in 2020 to 2.23 in 2019, it rebounded in subsequent years, reflecting a positive liquidity position for the company. Overall, the trend in Mercer International Inc.'s quick ratio indicates that the company has been effective in managing its short-term liquidity and is well-positioned to meet its near-term financial obligations.