MillerKnoll Inc (MLKN)
Quick ratio
| Jun 3, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 223,500 | 230,300 | 396,400 | 454,000 | 159,200 |
| Short-term investments | US$ in thousands | — | 7,700 | 7,700 | 7,000 | 8,800 |
| Receivables | US$ in thousands | 363,500 | 380,900 | 221,100 | 199,500 | 252,300 |
| Total current liabilities | US$ in thousands | 702,800 | 877,400 | 476,500 | 470,200 | 446,100 |
| Quick ratio | 0.84 | 0.71 | 1.31 | 1.40 | 0.94 |
June 3, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($223,500K
+ $—K
+ $363,500K)
÷ $702,800K
= 0.84
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. It is calculated by dividing quick assets (cash, marketable securities, and accounts receivable) by current liabilities.
Analyzing MillerKnoll Inc's quick ratio over the past five years, we observe fluctuations in the ratio. In the most recent fiscal year, ending on June 3, 2023, the quick ratio stood at 0.98, indicating that the company had $0.98 of quick assets available for every $1 of current liabilities. This represents a slight improvement compared to the previous year's quick ratio of 0.83.
The quick ratio in 2021, at 1.35, reflected a relatively strong position, suggesting that the company had more than enough quick assets to cover its short-term obligations. This was also the case in 2020, with a quick ratio of 1.40, indicating a healthy ability to meet immediate financial demands.
However, the quick ratio decreased to 1.07 in 2019, pointing to a lower level of liquidity compared to the subsequent years. This fluctuation in the quick ratio over the years indicates varying levels of reliance on quick assets to cover short-term liabilities.
The trend in MillerKnoll Inc's quick ratio implies a need for continued monitoring of the company's liquidity position and management of its current assets and liabilities to ensure effective short-term financial management.
Overall, the quick ratio provides valuable insight into MillerKnoll Inc's ability to meet its short-term obligations using its most liquid assets, signaling the company's financial strength and ability to weather short-term challenges.