Pitney Bowes Inc (PBI)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 469,726 | 601,053 | 669,981 | 732,480 | 921,450 |
| Short-term investments | US$ in thousands | 16,374 | 22,166 | 11,172 | 14,440 | 18,974 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 1,672,730 | 1,730,410 | 1,727,800 | 1,727,940 | 1,870,460 |
| Quick ratio | 0.29 | 0.36 | 0.39 | 0.43 | 0.50 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($469,726K
+ $16,374K
+ $—K)
÷ $1,672,730K
= 0.29
The quick ratio, also known as the acid-test ratio, provides insight into a company's ability to meet its short-term obligations with its most liquid assets. The decreasing trend in Pitney Bowes Inc's quick ratio from 0.50 on December 31, 2020, to 0.29 on December 31, 2024, signifies a declining liquidity position over the period.
A quick ratio below 1 indicates that the company may have difficulty meeting its current liabilities with its quick assets alone. Pitney Bowes Inc's decreasing quick ratio indicates a potential risk in the company's ability to cover its short-term obligations without relying on selling inventory or obtaining additional financing.
It is crucial for investors and stakeholders to monitor this trend closely, as a diminishing quick ratio could indicate financial distress or inefficiency in managing short-term liquidity. Further analysis of the company's cash conversion cycle and working capital management may provide additional insights into the reasons behind the decline in the quick ratio.