PepsiCo Inc (PEP)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 9,711,000 | 4,954,000 | 5,596,000 | 8,185,000 | 5,509,000 |
| Short-term investments | US$ in thousands | 292,000 | 394,000 | 392,000 | 1,366,000 | 229,000 |
| Receivables | US$ in thousands | 10,815,000 | 10,163,000 | 8,680,000 | 8,404,000 | 7,822,000 |
| Total current liabilities | US$ in thousands | 31,647,000 | 26,785,000 | 26,220,000 | 23,372,000 | 20,461,000 |
| Quick ratio | 0.66 | 0.58 | 0.56 | 0.77 | 0.66 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($9,711,000K
+ $292,000K
+ $10,815,000K)
÷ $31,647,000K
= 0.66
The quick ratio, also known as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets. A quick ratio below 1 indicates that a company may have difficulty meeting its short-term obligations. PepsiCo Inc's quick ratio has fluctuated over the past five years, ranging from 0.56 to 0.77.
In 2023, PepsiCo's quick ratio stands at 0.66, indicating that the company has $0.66 in highly liquid assets available to cover each $1 of its current liabilities. This shows a slight improvement compared to the previous year's quick ratio of 0.58. However, the ratio remains below 1, suggesting that PepsiCo may face challenges in meeting its short-term obligations solely with its liquid assets.
It is essential to monitor changes in the quick ratio over time to assess PepsiCo's liquidity position and its ability to manage short-term financial obligations effectively. An increasing trend in the quick ratio would indicate improved liquidity, while a decreasing trend may raise concerns about the company's ability to meet its short-term liabilities.
Peer comparison
Dec 31, 2023