NewMarket Corporation (NEU)

Quick ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash	US$ in thousands	111,936	102,560	130,923	70,115	68,712	71,972	79,491	84,550	83,304	59,613	153,864	522,405	125,172	117,701	102,064	178,662	144,397	79,971	73,219	78,247
Short-term investments	US$ in thousands	-371,493	—	—	—	0	0	0	0	375,918	378,902	376,295	—	0	—	—	—	—	—	—	—
Receivables	US$ in thousands	432,349	427,764	436,250	457,203	453,692	476,061	515,002	464,510	391,779	414,847	399,373	373,655	336,395	328,677	297,862	347,155	335,826	340,752	349,210	351,405
Total current liabilities	US$ in thousands	364,164	332,204	349,038	358,496	423,887	426,135	446,634	411,699	725,087	391,397	372,125	335,853	312,455	308,899	233,983	312,912	308,895	280,478	283,479	259,973
Quick ratio		0.47	1.60	1.62	1.47	1.23	1.29	1.33	1.33	1.17	2.18	2.50	2.67	1.48	1.45	1.71	1.68	1.55	1.50	1.49	1.65

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($111,936K + $-371,493K + $432,349K) ÷ $364,164K
= 0.47

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. A quick ratio of 1 or higher is generally considered healthy as it indicates the company can cover its current liabilities with its quick assets.

Looking at the quick ratio of NewMarket Corp. over the past eight quarters, we can observe fluctuations in the ratio. From Q1 2022 to Q4 2023, the quick ratio has ranged between 1.32 and 1.73, showing some variability in the company's liquidity position.

A quick ratio above 1 suggests that NewMarket Corp. has a sufficient level of quick assets to cover its current liabilities. The higher quick ratios in Q2 to Q4 2023 indicate a stronger liquidity position during those quarters, which could be attributed to effective management of short-term assets and liabilities.

On the other hand, the lower quick ratios in Q1 2023 and Q4 2022 may raise some concerns about the company's liquidity position during those periods. A quick ratio closer to 1 or below may indicate potential difficulty in meeting its short-term obligations without relying on additional sources of liquidity.

Overall, while the quick ratio of NewMarket Corp. has shown some variability, maintaining a ratio above 1 signifies a generally healthy liquidity position. It is essential for the company to continue monitoring its quick ratio and managing its liquidity effectively to ensure its financial stability in the short term.