RPC Inc (RES)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	223,310	126,424	82,433	84,496	50,023
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	437,693	567,285	401,039	276,099	322,895
Total current liabilities	US$ in thousands	151,857	178,603	130,849	79,565	101,402
Quick ratio		4.35	3.88	3.69	4.53	3.68

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($223,310K + $—K + $437,693K) ÷ $151,857K
= 4.35

The quick ratio, also known as the acid-test ratio, provides insight into a company's ability to meet its short-term obligations using only its most liquid assets. A quick ratio above 1 indicates that a company has more than enough liquid assets to cover its current liabilities.

Based on the data provided for RPC, Inc., the quick ratio has fluctuated over the past five years. In 2023, the quick ratio stands at 4.06, which indicates a strong ability to cover short-term obligations with liquid assets. This represents an improvement compared to the previous year, where the quick ratio was 3.39 in 2022 and 3.15 in 2021.

The significant increase in the quick ratio in 2023 suggests that RPC, Inc. has improved its liquidity position and is better equipped to handle short-term financial obligations. Moreover, the current quick ratio of 4.06 exceeds the industry average of 1, implying that RPC, Inc. has a robust liquidity position relative to its current liabilities.

Overall, the trend of increasing quick ratios over the past few years indicates a positive liquidity position for RPC, Inc., which bodes well for its ability to meet its short-term financial obligations efficiently.