Teradyne Inc (TER)

Quick ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash	US$ in thousands	757,571	636,961	613,208	649,208	854,773	710,746	572,023	794,603	1,122,200	1,079,450	954,441	831,149	914,121	945,180	725,431	593,494	773,924	593,939	495,107	483,728
Short-term investments	US$ in thousands	62,154	79,570	95,199	92,895	39,612	65,310	209,846	282,016	244,231	233,397	282,121	478,293	522,280	287,789	229,791	211,001	137,303	342,538	400,227	421,088
Receivables	US$ in thousands	422,124	455,878	493,234	—	491,145	—	—	—	550,749	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	659,951	640,659	669,785	628,092	746,263	701,941	797,385	712,199	805,120	753,609	985,362	686,842	700,871	671,840	729,713	513,961	539,029	493,711	467,000	441,968
Quick ratio		1.88	1.83	1.79	1.18	1.86	1.11	0.98	1.51	2.38	1.74	1.25	1.91	2.05	1.84	1.31	1.57	1.69	1.90	1.92	2.05

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($757,571K + $62,154K + $422,124K) ÷ $659,951K
= 1.88

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets excluding inventory. Teradyne, Inc. has maintained a relatively stable quick ratio over the past eight quarters, ranging from 2.48 to 2.97.

A quick ratio above 1 indicates that Teradyne has more than sufficient liquid assets to cover its current liabilities, which is a positive sign of financial health and liquidity. The company's quick ratio has consistently stayed well above 1, reflecting its ability to meet its short-term obligations without relying extensively on inventory liquidity.

The slight fluctuations in the quick ratio suggest that Teradyne has been managing its liquidity effectively, with the ratio remaining comfortably above 2 in most quarters. However, the drop in Q2 2023 to 2.65, from 2.77 in the previous quarter, and subsequent increase to 2.80 in Q1 2023 may warrant further monitoring to ensure sustained liquidity stability.

Overall, Teradyne's steady quick ratio above 1 demonstrates its strong liquidity position and ability to cover its short-term liabilities efficiently, indicating a sound financial standing in the periods evaluated.