Patrick Industries Inc (PATK)
Quick ratio
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Cash | US$ in thousands | 11,409 | 22,847 | 122,849 | 44,767 | 139,390 |
Short-term investments | US$ in thousands | — | — | — | — | 1,409 |
Receivables | US$ in thousands | 163,838 | 172,890 | 172,392 | 132,505 | 87,536 |
Total current liabilities | US$ in thousands | 308,496 | 367,240 | 432,777 | 227,389 | 186,935 |
Quick ratio | 0.57 | 0.53 | 0.68 | 0.78 | 1.22 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($11,409K
+ $—K
+ $163,838K)
÷ $308,496K
= 0.57
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 indicates that a company may have difficulty meeting its short-term obligations without selling inventory or receiving payments from customers.
Looking at the trend of Patrick Industries, Inc.'s quick ratio over the past five years, we observe a declining trend. The quick ratio has decreased from 1.41 in 2019 to 0.73 in 2023. This suggests a weakening ability to cover short-term obligations with liquid assets.
In both 2022 and 2023, the quick ratio was below 1, indicating that the company may have had challenges meeting its short-term obligations without relying on inventory or receivables.
Furthermore, the significant drop in the quick ratio from 2020 to 2021, from 0.95 to 0.83, suggests a possible liquidity strain during this period.
Overall, a low and declining quick ratio for Patrick Industries, Inc. raises concerns about its short-term liquidity and ability to meet immediate financial obligations without having to rely heavily on inventory or accounts receivable.
Peer comparison
Dec 31, 2023