Ufp Industries Inc (UFPI)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,171,830 | 1,118,330 | 559,397 | 286,662 | 436,507 |
| Short-term investments | US$ in thousands | 31,087 | 34,745 | 36,013 | 36,495 | 24,308 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 512,448 | 567,976 | 611,835 | 776,042 | 463,749 |
| Quick ratio | 2.35 | 2.03 | 0.97 | 0.42 | 0.99 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,171,830K
+ $31,087K
+ $—K)
÷ $512,448K
= 2.35
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. A quick ratio below 1 indicates that a company may have difficulty in meeting its short-term liabilities.
Analyzing the quick ratio of Ufp Industries Inc from December 31, 2020, to December 31, 2024, reveals fluctuations in the company's liquidity position. The quick ratio decreased from 0.99 in 2020 to 0.42 in 2021, signaling a potential liquidity concern as the company may struggle to cover its current liabilities with its quick assets.
However, there was a significant improvement in the quick ratio in subsequent years, rising to 0.97 in 2022, 2.03 in 2023, and further to 2.35 in 2024. These increases indicate a positive trend in the company's liquidity position, with Ufp Industries Inc holding more than enough quick assets to cover its short-term obligations in the most recent years.
Overall, the quick ratio trend suggests that Ufp Industries Inc has made significant improvements in its liquidity management over the years, moving from a potentially concerning position in 2021 to a comfortable liquidity position in 2024. An increasing quick ratio generally reflects a stronger financial position and ability to meet short-term obligations efficiently.