Scotts Miracle-Gro Company (SMG)
Quick ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 71,600 | 31,900 | 86,800 | 244,100 | 16,600 |
| Short-term investments | US$ in thousands | — | 16,700 | 117,000 | 207 | — |
| Receivables | US$ in thousands | 176,800 | 304,200 | 299,000 | 483,400 | 474,800 |
| Total current liabilities | US$ in thousands | 750,300 | 773,700 | 963,900 | 1,140,400 | 950,400 |
| Quick ratio | 0.33 | 0.46 | 0.52 | 0.64 | 0.52 |
September 30, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($71,600K
+ $—K
+ $176,800K)
÷ $750,300K
= 0.33
The quick ratio of Scotts Miracle-Gro Company has exhibited a declining trend over the past five years, decreasing from 0.52 in 2020 to 0.33 in 2024. This indicates a weakening ability of the company to meet its short-term obligations with its most liquid assets. A quick ratio below 1 suggests that the company may face difficulties in covering its current liabilities with its current assets excluding inventory.
The decreasing quick ratio may be a cause for concern as it indicates a potential liquidity risk for the company. Investors and creditors may view a low quick ratio unfavorably as it raises doubts about the company's ability to withstand unforeseen financial challenges. It is essential for Scotts Miracle-Gro Company to closely monitor its liquidity position and take proactive measures to improve its quick ratio to ensure financial stability and sound operational performance in the future.
Peer comparison
Sep 30, 2024