Rush Enterprises A Inc (RUSHA)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	183,725	201,044	148,146	312,048	181,620
Short-term investments	US$ in thousands	—	—	—	—	—
Receivables	US$ in thousands	282,986	250,427	166,189	196,508	200,646
Total current liabilities	US$ in thousands	1,673,310	1,428,670	1,003,500	1,026,790	1,507,390
Quick ratio		0.28	0.32	0.31	0.50	0.25

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($183,725K + $—K + $282,986K) ÷ $1,673,310K
= 0.28

The quick ratio, also known as the acid-test ratio, is a measure of a company's short-term liquidity and ability to meet its immediate financial obligations. It is calculated by dividing the total current assets minus inventory by total current liabilities.

Rush Enterprises A Inc's quick ratio has fluctuated over the past five years, ranging from 0.25 in 2019 to 0.50 in 2020. The quick ratio indicates the company's ability to cover its short-term liabilities with its most liquid assets excluding inventory.

In 2023, Rush Enterprises A Inc's quick ratio stands at 0.28, which suggests that the company may have difficulties meeting its short-term obligations using only its most liquid assets. A quick ratio below 1 may indicate potential liquidity concerns as the company may struggle to pay its short-term liabilities without relying on selling its inventory.

Furthermore, the decreasing trend in the quick ratio from 2020 to 2023 may indicate a weakening liquidity position for Rush Enterprises A Inc. It is essential for the company to closely monitor its liquidity position and potentially take steps to improve its ability to meet short-term obligations promptly.

Overall, a low quick ratio can be a cause for concern, and Rush Enterprises A Inc should focus on improving its liquidity position to ensure its financial health and ability to meet its financial obligations in the short term.