PriceSmart Inc (PSMT)

Current ratio

		Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019
Total current assets	US$ in thousands	832,347	822,828	847,652	880,835	877,107	847,190	836,771	853,285	773,579	749,871	741,280	782,416	697,204	639,214	645,739	710,551	699,002	606,454	525,555	571,877
Total current liabilities	US$ in thousands	680,148	694,391	708,730	705,197	634,477	587,265	586,583	611,558	579,456	577,757	560,555	594,154	533,552	482,996	501,601	558,397	568,275	493,249	421,844	470,076
Current ratio		1.22	1.18	1.20	1.25	1.38	1.44	1.43	1.40	1.34	1.30	1.32	1.32	1.31	1.32	1.29	1.27	1.23	1.23	1.25	1.22

August 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $832,347K ÷ $680,148K
= 1.22

The current ratio of PriceSmart Inc has shown some fluctuation over the past two years, indicating changes in the company's ability to meet its short-term obligations. The current ratio is a measure of a company's liquidity and its ability to cover its short-term liabilities with its current assets.

From November 2019 to August 2020, the current ratio remained relatively stable between 1.22 and 1.27. However, starting from November 2020, there was an upward trend in the current ratio, peaking at 1.44 in May 2023. This could suggest an improvement in PriceSmart Inc's short-term financial position, as it had more current assets available to cover its current liabilities during this period.

Subsequently, there was a slight decline in the current ratio from May 2023 to August 2024, with the ratio ranging between 1.18 and 1.22. While these values indicate that PriceSmart Inc still has more current assets than current liabilities, the downward trend suggests a potential decrease in liquidity or an increase in short-term obligations.

Overall, PriceSmart Inc's current ratio has shown some variability over the analyzed period. Investors and stakeholders may want to further investigate the reasons behind these fluctuations to understand the company's liquidity position and financial health.