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