RH (RH)
Quick ratio
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 30,413 | 123,688 | 123,688 | 1,511,760 | 1,508,100 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | — | 78,845 | — | — | 79,954 |
| Total current liabilities | US$ in thousands | 905,126 | 872,868 | 872,868 | 885,973 | 885,973 |
| Quick ratio | 0.03 | 0.23 | 0.14 | 1.71 | 1.79 |
January 31, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($30,413K
+ $—K
+ $—K)
÷ $905,126K
= 0.03
The quick ratio measures a company's ability to fulfill its short-term obligations using its most liquid assets. A quick ratio above 1 indicates that the company can cover its current liabilities with its liquid assets.
RH's quick ratio has shown fluctuations over the years. As of January 28, 2023, the quick ratio was 1.79, indicating that RH had $1.79 in liquid assets available to cover each dollar of current liabilities. This suggests a healthy liquidity position.
However, there was a decrease in the quick ratio to 1.71 by January 31, 2023, but it still remained above 1, indicating continued ability to meet short-term obligations.
By January 31, 2024, the quick ratio decreased significantly to 0.14, signaling a potential liquidity concern for RH, as the company may struggle to meet its short-term obligations with its current liquid assets.
Subsequently, by February 3, 2024, there was a slight improvement in the quick ratio to 0.23, but it still indicates a constrained liquidity position for the company.
The quick ratio deteriorated further to 0.03 by January 31, 2025, indicating a severe liquidity issue for RH. This implies that the company may face challenges in fulfilling its short-term obligations using its current liquid assets.
In summary, RH's quick ratio has depicted significant fluctuations over the years, ranging from a healthy liquidity position to a concerning liquidity crunch. It is important for investors and stakeholders to closely monitor RH's liquidity management strategies to ensure the company's financial health and ability to meet its short-term obligations.