Resideo Technologies Inc (REZI)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 636,000 | 326,000 | 775,000 | 517,000 | 122,000 |
| Short-term investments | US$ in thousands | — | 23,000 | 4,000 | — | — |
| Receivables | US$ in thousands | 973,000 | 1,002,000 | 876,000 | 863,000 | 817,000 |
| Total current liabilities | US$ in thousands | 1,525,000 | 1,546,000 | 1,494,000 | 1,538,000 | 1,494,000 |
| Quick ratio | 1.06 | 0.87 | 1.11 | 0.90 | 0.63 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($636,000K
+ $—K
+ $973,000K)
÷ $1,525,000K
= 1.06
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that the company has enough liquid assets to cover its short-term liabilities without having to sell inventory.
Analyzing the trend of Resideo Technologies Inc's quick ratio over the past five years, we observe fluctuations. In 2019, the quick ratio was 0.75, indicating a potential liquidity issue as the company may have had difficulties meeting its short-term obligations without relying heavily on inventory.
However, there was a significant improvement in 2021 with a quick ratio of 1.21, suggesting a stronger liquidity position. This improvement continued in 2023 with a quick ratio of 1.18, indicating that the company has increased its ability to cover short-term liabilities with its liquid assets.
It is important for investors and stakeholders to monitor the quick ratio over time to assess the company's liquidity position and its ability to meet short-term obligations comfortably. In the case of Resideo Technologies Inc, the increasing trend in the quick ratio signals an improvement in the company's liquidity management, which may enhance its financial stability and ability to navigate short-term challenges.