Sprouts Farmers Market LLC (SFM)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 201,794 | 293,233 | 245,287 | 169,697 | 85,314 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 30,313 | 16,108 | 21,574 | 14,815 | 15,713 |
| Total current liabilities | US$ in thousands | 546,869 | 522,380 | 513,473 | 496,132 | 416,812 |
| Quick ratio | 0.42 | 0.59 | 0.52 | 0.37 | 0.24 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($201,794K
+ $—K
+ $30,313K)
÷ $546,869K
= 0.42
The quick ratio of Sprouts Farmers Market Inc has shown a strengthening trend over the past five years, indicating an improvement in the company's short-term liquidity position. The quick ratio increased from 0.26 in 2019 to 0.51 in 2023, reflecting a positive trajectory in the company's ability to meet its short-term obligations with its most liquid assets.
A quick ratio above 1 is typically considered favorable as it suggests that the company has sufficient liquid assets to cover its current liabilities. While Sprouts Farmers Market Inc's quick ratio has not reached the ideal benchmark of 1, the upward trend indicates progress towards a healthier liquidity position.
The consistent increase in the quick ratio demonstrates the company's effort to manage its short-term liquidity effectively, potentially reducing the risk of financial distress and improving its ability to navigate through challenging economic conditions. Investors and stakeholders may view this trend positively as it reflects a stronger financial position and a more sustainable business model.
Peer comparison
Dec 31, 2023