Packaging Corp of America (PKG)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 648,000 | 320,000 | 618,700 | 974,600 | 679,500 |
| Short-term investments | US$ in thousands | 493,500 | 85,200 | 86,100 | 105,600 | 87,900 |
| Receivables | US$ in thousands | 1,037,500 | 1,067,500 | 1,078,400 | 837,500 | 872,100 |
| Total current liabilities | US$ in thousands | 1,265,700 | 875,500 | 884,800 | 782,600 | 723,800 |
| Quick ratio | 1.72 | 1.68 | 2.02 | 2.45 | 2.27 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($648,000K
+ $493,500K
+ $1,037,500K)
÷ $1,265,700K
= 1.72
The quick ratio, also known as the acid-test ratio, measures a company's short-term liquidity and ability to meet its immediate financial obligations using only its most liquid assets. A quick ratio of 1 or higher is generally considered healthy, as it indicates that the company has enough liquid assets to cover its current liabilities.
Analyzing Packaging Corp Of America's quick ratio over the past 5 years, we observe the following trends:
- The quick ratio has been consistently above 1 each year, indicating the company's ability to meet its short-term obligations using its quick assets.
- There has been a slight fluctuation in the quick ratio over the years, with values ranging from a low of 1.75 in 2022 to a high of 2.51 in 2020.
- The quick ratio peaked in 2020 at 2.51 and has generally decreased since then, with the latest value reported at 1.77 in 2023.
Overall, Packaging Corp Of America's quick ratio demonstrates a strong liquidity position, with the company maintaining a ratio above 1 in each of the past 5 years. However, the slight downward trend in recent years should be monitored to ensure the company continues to have sufficient liquid assets to cover its short-term liabilities.
Peer comparison
Dec 31, 2023