Penske Automotive Group Inc (PAG)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	96,400	106,500	100,700	49,500	28,100
Short-term investments	US$ in thousands	—	—	—	1,500,000	—
Receivables	US$ in thousands	1,114,600	906,700	734,000	806,900	960,300
Total current liabilities	US$ in thousands	5,657,900	4,713,100	4,274,600	4,674,900	5,451,000
Quick ratio		0.21	0.21	0.20	0.50	0.18

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($96,400K + $—K + $1,114,600K) ÷ $5,657,900K
= 0.21

The quick ratio of Penske Automotive Group Inc has shown a gradual improvement over the past five years. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets, excluding inventory. The company's quick ratio has increased from 0.20 in 2019 to 0.25 in 2023, suggesting enhanced liquidity and a stronger ability to cover its current liabilities with its quick assets.

A quick ratio of 0.25 in 2023 indicates that for every dollar of current liabilities, the company has $0.25 in highly liquid assets to meet those obligations without relying on selling inventory. This signifies a prudent level of liquidity to handle short-term financial obligations. The consistent maintenance of a quick ratio above 0.20 in the last five years implies effective management of working capital and a reduced risk of liquidity issues.

Overall, the increasing trend in Penske Automotive Group Inc's quick ratio demonstrates a positive financial position in terms of short-term liquidity and the ability to meet current payment obligations using its readily available assets.