PriceSmart Inc (PSMT)

Quick ratio

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Cash	US$ in thousands	125,364	239,984	237,710	202,060	299,481
Short-term investments	US$ in thousands	100,165	91,081	11,160	50,233	46,509
Receivables	US$ in thousands	18,847	17,904	13,391	12,359	13,153
Total current liabilities	US$ in thousands	680,148	634,477	579,456	533,552	568,275
Quick ratio		0.36	0.55	0.45	0.50	0.63

August 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($125,364K + $100,165K + $18,847K) ÷ $680,148K
= 0.36

The quick ratio of PriceSmart Inc has displayed a declining trend over the past five years, decreasing from 0.63 in 2020 to 0.36 in 2024. This indicates a weakening ability of the company to meet its short-term obligations using its most liquid assets. A quick ratio below 1.0 suggests that PriceSmart may have difficulties in fulfilling its current liabilities without relying on selling inventory. It is crucial for the company to monitor and improve its liquidity position to ensure financial stability and meet its obligations in a timely manner.