PriceSmart Inc (PSMT)

Quick ratio

		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	Aug 31, 2019	May 31, 2019
Cash	US$ in thousands	170,563	174,452	239,984	222,668	260,927	267,944	237,710	207,528	178,705	176,072	202,060	190,687	180,179	207,955	299,481	261,788	132,845	111,359	102,653	106,445
Short-term investments	US$ in thousands	93,630	88,002	91,081	112,629	54,322	8,920	11,160	19,767	26,933	39,201	50,233	67,068	81,430	73,980	46,509	40,042	30,448	25,098	17,045	17,023
Receivables	US$ in thousands	19,819	17,645	17,904	15,031	16,401	18,757	13,391	14,569	15,001	15,572	12,359	12,221	11,874	15,150	13,153	10,886	10,905	10,293	9,872	9,543
Total current liabilities	US$ in thousands	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	407,454	390,280
Quick ratio		0.40	0.40	0.55	0.60	0.57	0.48	0.45	0.42	0.39	0.39	0.50	0.56	0.55	0.53	0.63	0.63	0.41	0.31	0.32	0.34

February 29, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($170,563K + $93,630K + $19,819K) ÷ $708,730K
= 0.40

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 of 1 or higher is generally considered healthy, as it indicates that a company has enough liquid assets to cover its current liabilities.

Based on the data provided for PriceSmart Inc, the quick ratio has trended downwards over the past several quarters. The quick ratio ranged from 0.31 to 0.63 during the period from Nov 2019 to Feb 2024. The lowest quick ratio of 0.31 was recorded in Feb 2020, indicating a potential liquidity concern during that period.

The quick ratio fluctuated between 0.39 and 0.60 in the most recent quarters, suggesting some variability in PriceSmart Inc's ability to cover its short-term obligations with its liquid assets. The quick ratio of 0.40 in both Feb 2024 and Nov 2023 indicates that for every dollar of current liabilities, the company had $0.40 of quick assets available.

Overall, the downward trend in the quick ratio over the quarters may raise concerns about PriceSmart Inc's short-term liquidity position. It is important for investors and stakeholders to monitor this ratio closely to ensure the company can meet its short-term financial obligations efficiently.