Trinity Industries Inc (TRN)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 105,700 | 79,600 | 167,300 | 132,000 | 166,200 |
| Short-term investments | US$ in thousands | — | 19,700 | — | — | — |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 607,600 | 548,500 | 513,800 | 471,100 | 546,000 |
| Quick ratio | 0.17 | 0.18 | 0.33 | 0.28 | 0.30 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($105,700K
+ $—K
+ $—K)
÷ $607,600K
= 0.17
The quick ratio, also known as the acid-test ratio, measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of less than 1 indicates that a company may have difficulty meeting its short-term liabilities.
In the case of Trinity Industries, Inc., the quick ratio has fluctuated over the past five years. The quick ratio was 0.78 in both 2023 and 2021, showing a relatively consistent performance in those years. However, the ratio was lower at 0.75 in 2022 and 0.81 in 2019.
The sharp increase to 1.65 in 2020 indicates a significant improvement in Trinity Industries' ability to cover its short-term obligations with its quick assets. This increase could be attributed to a substantial increase in cash or highly liquid assets relative to current liabilities in that year.
Overall, the fluctuating quick ratio of Trinity Industries, Inc. suggests some variability in the company's liquidity position over the years, with the ratio falling below 1 in most years except 2020. Further analysis of the components of quick assets and liabilities would provide additional insights into the company's liquidity management.
Peer comparison
Dec 31, 2023