Reliance Steel & Aluminum Co (RS)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,080,200 | 1,173,400 | 300,500 | 683,500 | 174,300 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 1,508,000 | 1,602,300 | 1,683,000 | 928,400 | 1,105,000 |
| Total current liabilities | US$ in thousands | 843,600 | 1,375,300 | 1,065,000 | 613,000 | 675,300 |
| Quick ratio | 3.07 | 2.02 | 1.86 | 2.63 | 1.89 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,080,200K
+ $—K
+ $1,508,000K)
÷ $843,600K
= 3.07
Reliance Steel & Aluminum Co.'s quick ratio has displayed variability over the past five years. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets.
In 2023, the quick ratio stands at 3.23, indicating a significant improvement compared to the prior year. This suggests that the company has a strong ability to cover its short-term liabilities with its quick assets such as cash, marketable securities, and accounts receivable.
The quick ratio was also relatively strong in 2020 and 2019 at 2.76 and 2.02, respectively, indicating the company's consistent ability to meet its short-term obligations during those years.
However, the quick ratio dropped to 2.10 in 2022 and 1.97 in 2021, signaling a potential decrease in liquidity and ability to cover short-term obligations with quick assets in those particular years.
Overall, a high quick ratio such as in 2023 suggests that Reliance Steel & Aluminum Co. has a strong liquidity position and may be better equipped to weather potential short-term financial challenges. However, it's important for the company to monitor and manage its liquidity effectively to ensure continued financial stability.
Peer comparison
Dec 31, 2023