MSC Industrial Direct Company Inc (MSM)
Quick ratio
| Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 50,052 | 43,537 | 40,536 | 125,211 | 32,286 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 435,421 | 687,608 | 560,373 | 491,743 | 541,091 |
| Total current liabilities | US$ in thousands | 649,436 | 725,944 | 561,928 | 408,733 | 446,916 |
| Quick ratio | 0.75 | 1.01 | 1.07 | 1.51 | 1.28 |
September 2, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($50,052K
+ $—K
+ $435,421K)
÷ $649,436K
= 0.75
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio above 1 indicates that a company has enough liquid assets to cover its current liabilities.
For MSC Industrial Direct Co., Inc., the quick ratio has exhibited a declining trend over the past five years. In September 2023, the quick ratio stands at 0.91, reflecting a decrease from the previous year's 1.14. This suggests a reduced ability to cover short-term obligations using liquid assets alone.
The downward trend in the quick ratio may raise concerns about the company's liquidity and its ability to meet short-term financial commitments without relying on inventory sales. It would be important to further investigate the reasons behind this declining trend to assess the company's overall liquidity position and financial health.
Peer comparison
Sep 2, 2023