Polaris Industries Inc (PII)
Quick ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 367,800 | 295,300 | 340,400 | 322,900 | 324,500 | 318,900 | 314,200 | 367,100 | 502,300 | 309,700 | 278,000 | 432,400 | 631,700 | 820,600 | 544,400 | 424,400 | 157,100 | 122,200 | 96,100 | 151,400 |
| Short-term investments | US$ in thousands | — | 7,900 | 6,700 | 1,400 | 5,900 | 7,000 | 5,400 | 8,300 | 6,900 | 6,800 | 10,800 | 46,000 | 3,000 | 44,000 | — | — | — | 16 | — | — |
| Receivables | US$ in thousands | 315,400 | 519,000 | 312,900 | 327,100 | 363,300 | 428,200 | 301,000 | 253,300 | 244,500 | 243,300 | 220,600 | 237,600 | 261,100 | 247,000 | 209,400 | 213,800 | 222,877 | 232,189 | 231,538 | 232,362 |
| Total current liabilities | US$ in thousands | 1,933,800 | 2,438,300 | 2,414,900 | 2,298,400 | 2,328,600 | 2,212,700 | 2,340,200 | 2,250,900 | 2,230,100 | 1,844,800 | 1,822,100 | 1,856,900 | 1,889,400 | 2,239,000 | 1,907,600 | 1,513,000 | 1,528,000 | 1,546,120 | 1,332,380 | 1,248,110 |
| Quick ratio | 0.35 | 0.34 | 0.27 | 0.28 | 0.30 | 0.34 | 0.27 | 0.28 | 0.34 | 0.30 | 0.28 | 0.39 | 0.47 | 0.50 | 0.40 | 0.42 | 0.25 | 0.23 | 0.25 | 0.31 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($367,800K
+ $—K
+ $315,400K)
÷ $1,933,800K
= 0.35
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term liabilities with its most liquid assets. A higher quick ratio indicates a stronger liquidity position.
Looking at the quick ratio trend of Polaris Inc over the past eight quarters, we observe fluctuations within a range of 0.34 to 0.46. Notably, the quick ratio increased to 0.46 in Q4 2023 from 0.41 in the previous quarter, indicating a slight improvement in the company's short-term liquidity position.
While the quick ratio in Q4 2023 is higher compared to the same period last year (Q4 2022), the variability in the quick ratio over the quarters suggests that Polaris Inc may have inconsistent liquidity management. It is important for the company to maintain a quick ratio above 1.0 to ensure it can comfortably cover its short-term liabilities without relying heavily on selling inventory.
Further analysis of Polaris Inc's cash conversion cycle, inventory turnover, and accounts receivable turnover ratios may provide additional insights into the company's liquidity management and operational efficiency.