Rollins Inc (ROL)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 103,825 | 95,346 | 105,301 | 98,477 | 94,276 |
| Short-term investments | US$ in thousands | 1,000 | 500 | 12,600 | — | — |
| Receivables | US$ in thousands | 215,239 | 189,377 | 165,731 | 20,085 | 145,033 |
| Total current liabilities | US$ in thousands | 576,689 | 493,784 | 491,162 | 472,511 | 410,035 |
| Quick ratio | 0.56 | 0.58 | 0.58 | 0.25 | 0.58 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($103,825K
+ $1,000K
+ $215,239K)
÷ $576,689K
= 0.56
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term financial obligations using its most liquid assets. For Rollins, Inc., the quick ratio has remained relatively stable over the past five years, ranging from 0.60 to 0.71.
A quick ratio of 0.65 in 2023 implies that for every $1 of current liabilities, Rollins has $0.65 in liquid assets available to cover those obligations. This suggests that the company may face some challenges in meeting its short-term liabilities, as it falls below the ideal value of 1.0.
Although the ratio has been consistent around the 0.65 range in recent years, it is important to note that a quick ratio below 1.0 may indicate potential liquidity issues for Rollins. Further investigation into the composition of the current assets and liabilities is warranted to better understand the company's liquidity position and its ability to manage short-term financial obligations effectively.
Peer comparison
Dec 31, 2023