NOV Inc. (NOV)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,230,000 | 816,000 | 1,069,000 | 1,591,000 | 1,692,000 |
| Short-term investments | US$ in thousands | — | — | — | — | 51,000 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 2,347,000 | 2,435,000 | 2,437,000 | 1,910,000 | 1,867,000 |
| Quick ratio | 0.52 | 0.34 | 0.44 | 0.83 | 0.93 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,230,000K
+ $—K
+ $—K)
÷ $2,347,000K
= 0.52
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 below 1.0 may indicate a company's potential difficulty in meeting its short-term liabilities.
For NOV Inc., we observed a gradual decline in the quick ratio from 0.93 as of December 31, 2020, to 0.52 as of December 31, 2024. This downward trend suggests a decreasing ability to cover immediate financial obligations with its liquid assets over the years.
The quick ratio dropping from 0.93 to 0.83 by December 31, 2021, indicates a slight deterioration in short-term liquidity. Subsequently, the ratio decreased more significantly to 0.44 by December 31, 2022, and further declined to 0.34 by December 31, 2023, reflecting a worrisome trend of decreasing liquidity.
Although the quick ratio improved slightly to 0.52 by the end of December 31, 2024, it remains below 1.0, suggesting that NOV Inc. may face challenges in meeting its short-term obligations with its readily available assets. It would be prudent for stakeholders and management to closely monitor the company's liquidity position and implement strategies to improve it in the future.
Peer comparison
Dec 31, 2024