Pool Corporation (POOL)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 66,540 | 45,591 | 24,321 | 34,128 | 28,583 |
| Short-term investments | US$ in thousands | — | — | — | 223 | 655 |
| Receivables | US$ in thousands | 145,723 | 128,247 | 155,259 | 122,252 | 76,648 |
| Total current liabilities | US$ in thousands | 770,766 | 675,714 | 744,416 | 483,249 | 390,846 |
| Quick ratio | 0.28 | 0.26 | 0.24 | 0.32 | 0.27 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($66,540K
+ $—K
+ $145,723K)
÷ $770,766K
= 0.28
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term financial obligations with its most liquid assets. A quick ratio below 1 indicates that the company may have difficulties meeting its short-term liabilities with its current liquid assets.
Pool Corporation's quick ratio has shown a fluctuating trend over the past five years, ranging from 0.58 to 0.71. In 2023, the quick ratio stands at 0.58, indicating that the company may face challenges in meeting its short-term obligations with its available liquid assets.
The downward trend in the quick ratio from 2020 to 2023 may raise concerns about the company's liquidity position. Investors and creditors may scrutinize this trend to assess the company's ability to cover its short-term liabilities without relying on selling inventory or other current assets.
It is essential for Pool Corporation to monitor its quick ratio closely and take necessary steps to improve its liquidity position, such as increasing cash reserves or reducing short-term liabilities, to enhance its financial stability and meet its obligations efficiently.