Steel Dynamics Inc (STLD)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	589,464	1,400,890	1,628,420	1,243,870	1,368,620
Short-term investments	US$ in thousands	147,811	721,210	628,215	351	0
Receivables	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	2,150,580	2,332,300	2,032,300	2,227,370	1,258,790
Quick ratio		0.34	0.91	1.11	0.56	1.09

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($589,464K + $147,811K + $—K) ÷ $2,150,580K
= 0.34

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. In the case of Steel Dynamics Inc, the quick ratio has fluctuated over the years.

As of December 31, 2020, the quick ratio stood at a healthy 1.09, indicating that the company had $1.09 in liquid assets available to cover each $1 of its current liabilities. This suggests a strong ability to meet short-term obligations without relying heavily on inventory.

However, there was a significant decline in the quick ratio to 0.56 as of December 31, 2021, which may raise concerns about the company's short-term liquidity position. A quick ratio below 1.0 may suggest potential difficulty in meeting current obligations without selling inventory.

The quick ratio improved to 1.11 by December 31, 2022, indicating a better ability to cover short-term liabilities from liquid assets. This improvement suggests a more favorable liquidity position for the company in that period.

By December 31, 2023, the quick ratio decreased slightly to 0.91, indicating a potential decrease in the company's ability to cover short-term obligations with liquid assets compared to the previous year.

The quick ratio dropped significantly to 0.34 as of December 31, 2024, signaling a substantial decline in the company's ability to cover current liabilities with its most liquid assets. This sharp decrease may raise concerns about Steel Dynamics Inc's short-term liquidity position unless there are specific reasons or strategies behind this change.

Overall, fluctuations in Steel Dynamics Inc's quick ratio over the years suggest varying levels of short-term liquidity and underscore the importance of monitoring the company's ability to meet its current obligations efficiently.