Reliance Steel & Aluminum Co (RS)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 318,100 | 1,080,200 | 1,173,400 | 300,500 | 683,500 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 1,213,000 | 843,600 | 1,375,300 | 1,065,000 | 613,000 |
| Quick ratio | 0.26 | 1.28 | 0.85 | 0.28 | 1.12 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($318,100K
+ $—K
+ $—K)
÷ $1,213,000K
= 0.26
The quick ratio of Reliance Steel & Aluminum Co has experienced fluctuations over the past five years. Starting at 1.12 in December 2020, the ratio decreased significantly to 0.28 by December 2021, indicating a potential liquidity issue. This sharp drop could be attributed to a reduction in the company's ability to cover its current liabilities with its most liquid assets.
However, there was a notable improvement in the quick ratio in the following years, reaching 0.85 by December 2022 and further increasing to 1.28 by December 2023. These increases suggest that the company enhanced its ability to meet its short-term obligations using its current liquid assets more effectively.
Nevertheless, the quick ratio declined again to 0.26 by December 2024, signaling a potential decrease in liquidity compared to the previous year. This drop may indicate a challenge in the company's ability to meet its short-term liabilities with quick assets.
In conclusion, while there have been significant fluctuations in Reliance Steel & Aluminum Co's quick ratio over the five-year period, indicating varying levels of liquidity, the company demonstrated improvements in managing its short-term obligations in certain years, though facing challenges in others.