Trex Company Inc (TREX)
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 | 1,959 | 4,644 | 4,226 | 3,916 | 12,325 | 5,885 | 16,648 | 115,188 | 141,053 | 54,042 | 5,470 | 8,221 | 121,701 | 20,081 | 12,237 | 5,339 | 148,833 | 133,282 | 106,084 | 7,907 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Receivables | US$ in thousands | 50,747 | 200,909 | 281,618 | 316,706 | 122,036 | 89,929 | 178,978 | 201,643 | 151,502 | 265,560 | 271,245 | 309,527 | 114,571 | 253,416 | 249,735 | 241,755 | 81,137 | 117,677 | 122,279 | 219,345 |
| Total current liabilities | US$ in thousands | 91,062 | 182,306 | 322,797 | 447,765 | 290,599 | 180,675 | 138,823 | 143,020 | 88,702 | 156,008 | 171,556 | 235,625 | 106,353 | 110,109 | 111,769 | 116,950 | 78,670 | 87,524 | 81,469 | 106,575 |
| Quick ratio | 0.58 | 1.13 | 0.89 | 0.72 | 0.46 | 0.53 | 1.41 | 2.22 | 3.30 | 2.05 | 1.61 | 1.35 | 2.22 | 2.48 | 2.34 | 2.11 | 2.92 | 2.87 | 2.80 | 2.13 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,959K
+ $—K
+ $50,747K)
÷ $91,062K
= 0.58
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. A ratio higher than 1 indicates that a company has enough liquid assets to cover its current liabilities.
Analyzing the quick ratio of TREX Co., Inc. over the past eight quarters, we can observe fluctuations in the company's liquidity position. In Q4 2023, the quick ratio stands at 0.72, indicating that the company may have difficulties meeting its short-term obligations with its available liquid assets.
In the previous quarter, Q3 2023, the quick ratio improved to 1.17, suggesting a better ability to cover current liabilities with liquid assets. The improvement in Q3 followed a lower ratio of 0.92 in Q2 2023, indicating decreased liquidity compared to the previous quarter.
Looking further back, we see fluctuations in the quick ratio over earlier quarters. Q1 2023 had a ratio of 0.74, which was an improvement from the particularly low ratio of 0.50 in Q4 2022.
Comparing this quarter's quick ratio to the same quarter the previous year, we can see TREX Co., Inc. has shown variability in its liquidity position. Notably, the quick ratio has decreased significantly from the comparatively high ratios recorded in Q2 and Q1 of 2022 (1.57 and 2.37, respectively).
In summary, TREX Co., Inc.'s quick ratio has been fluctuating over the past eight quarters, indicating potential challenges in managing its short-term liquidity. Management may need to closely monitor the company's ability to convert its current assets into cash to meet its current obligations effectively.
Peer comparison
Dec 31, 2023