MGP Ingredients Inc (MGPI)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 25,273 18,388 47,889 21,568 21,662
Short-term investments US$ in thousands
Receivables US$ in thousands
Total current liabilities US$ in thousands 92,450 114,106 105,375 88,800 53,329
Quick ratio 0.27 0.16 0.45 0.24 0.41

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($25,273K + $—K + $—K) ÷ $92,450K
= 0.27

The quick ratio, also known as the acid-test ratio, provides insight into MGP Ingredients Inc's ability to meet its short-term financial obligations with its most liquid assets. A quick ratio above 1 indicates that the company has enough liquid assets to cover its current liabilities.

Analyzing the trend in MGP Ingredients Inc's quick ratio from 2020 to 2024, we observe fluctuations in the ratio. In December 31, 2020, the quick ratio was 0.41, indicating that the company had $0.41 in liquid assets available for each dollar of current liabilities.

However, by December 31, 2021, the quick ratio dropped to 0.24, suggesting a decrease in the company's ability to quickly cover its short-term obligations.

Subsequently, the quick ratio improved to 0.45 by December 31, 2022, reflecting a better liquidity position compared to the previous year.

On December 31, 2023, the quick ratio decreased significantly to 0.16, signaling potential liquidity challenges for MGP Ingredients Inc in meeting its short-term obligations.

Finally, by December 31, 2024, the quick ratio increased to 0.27, indicating a slight improvement in the company's ability to cover its current liabilities with its liquid assets.

Overall, the fluctuating nature of MGP Ingredients Inc's quick ratio over the years highlights the variability in the company's short-term liquidity position. It's essential for investors and stakeholders to monitor these trends to assess the company's ability to manage its short-term financial obligations effectively.