PPG Industries Inc (PPG)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,270,000 | 1,514,000 | 1,099,000 | 1,005,000 | 1,826,000 |
| Short-term investments | US$ in thousands | 88,000 | 75,000 | 55,000 | 67,000 | 96,000 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 5,014,000 | 5,054,000 | 4,721,000 | 4,745,000 | 4,816,000 |
| Quick ratio | 0.27 | 0.31 | 0.24 | 0.23 | 0.40 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,270,000K
+ $88,000K
+ $—K)
÷ $5,014,000K
= 0.27
The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to meet its short-term obligations using its most liquid assets. A higher quick ratio typically indicates a stronger liquidity position.
Analyzing PPG Industries Inc's quick ratio over the past five years, we observe a fluctuating trend. In December 31, 2020, the quick ratio was 0.40, indicating that the company had $0.40 in highly liquid assets available to cover each dollar of its current liabilities.
However, there was a notable decrease in the quick ratio to 0.23 by December 31, 2021, suggesting a potential liquidity strain. This low ratio may raise concerns about the company's ability to meet its short-term obligations using its quick assets.
Subsequently, there was a slight improvement in the quick ratio to 0.24 by December 31, 2022, which may indicate some efforts to enhance liquidity management. Nevertheless, the quick ratio remained below 1, signaling a liquidity challenge.
By December 31, 2023, the quick ratio increased to 0.31, showing further improvement in liquidity position. This uptrend suggests that PPG Industries Inc may have strengthened its ability to meet short-term obligations using liquid assets.
However, by December 31, 2024, the quick ratio declined to 0.27, implying a slight setback in liquidity compared to the previous year. It is essential for the company to monitor and manage its liquidity effectively to ensure it can meet its short-term financial commitments.
Overall, the fluctuating trend in PPG Industries Inc's quick ratio indicates varying levels of liquidity over the years, which calls for continued attention to maintain a healthy balance between quick assets and current liabilities.
Peer comparison
Dec 31, 2024