Planet Fitness Inc (PLNT)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 275,842 | 409,840 | 545,909 | 439,478 | 436,256 |
| Short-term investments | US$ in thousands | 204,447 | 0 | — | — | — |
| Receivables | US$ in thousands | 56,276 | 66,688 | 44,449 | 38,662 | 52,441 |
| Total current liabilities | US$ in thousands | 251,329 | 244,530 | 176,610 | 111,895 | 145,478 |
| Quick ratio | 2.13 | 1.95 | 3.34 | 4.27 | 3.36 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($275,842K
+ $204,447K
+ $56,276K)
÷ $251,329K
= 2.13
Planet Fitness Inc's quick ratio has shown a declining trend over the past five years, decreasing from 3.41 in 2019 to 1.67 in 2023. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that the company has sufficient liquid assets to cover its current liabilities.
The decreasing trend in Planet Fitness Inc's quick ratio may raise concerns about the company's ability to meet its short-term financial obligations. A quick ratio of 1.67 in 2023 suggests that the company may have slightly less liquidity to cover its current liabilities compared to previous years.
It is important for investors and stakeholders to closely monitor Planet Fitness Inc's liquidity position and assess the factors contributing to the declining quick ratio. Management may need to review its current asset management strategies and consider optimizing its liquidity position to ensure the company remains financially healthy and able to meet its short-term obligations.