Mesa Laboratories Inc (MLAB)

Quick ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Cash	US$ in thousands	28,214	32,910	49,346	263,865	81,380
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	39,055	42,551	41,224	23,787	21,132
Total current liabilities	US$ in thousands	44,312	43,359	48,055	32,583	26,008
Quick ratio		1.52	1.74	1.88	8.83	3.94

March 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($28,214K + $—K + $39,055K) ÷ $44,312K
= 1.52

The quick ratio, also known as the acid-test ratio, measures Mesa Laboratories Inc's ability to meet its short-term financial obligations using its quick assets. A higher quick ratio indicates a stronger liquidity position, as it suggests a company has an increased ability to cover its current liabilities with its most liquid assets.

Analyzing Mesa Laboratories Inc's quick ratio from March 31, 2020, to March 31, 2024, reveals a fluctuating trend. The quick ratio decreased from 3.94 in 2020 to 1.52 in 2024. This decline indicates a potential deterioration in the company's ability to cover its current liabilities with its quick assets.

It is important to note the sharp decrease in the quick ratio in 2021, dropping to 8.83. This unusually high quick ratio may be attributed to a significant increase in cash or highly liquid assets relative to current liabilities, potentially reflecting a temporary or abnormal financial situation during that period.

Overall, while Mesa Laboratories Inc's quick ratio has seen fluctuations over the years, the downward trend in recent periods may raise concerns about the company's liquidity position and its ability to meet short-term obligations with its quick assets. Further analysis and monitoring of the company's liquidity management would be prudent to assess its financial health accurately.