Ufp Industries Inc (UFPI)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 1,118,330 | 559,397 | 286,662 | 436,507 | 168,336 |
| Short-term investments | US$ in thousands | 34,745 | 36,013 | 36,495 | 24,308 | 18,527 |
| Receivables | US$ in thousands | 578,826 | 650,730 | 742,611 | 476,340 | 377,299 |
| Total current liabilities | US$ in thousands | 567,976 | 611,835 | 776,042 | 463,749 | 354,042 |
| Quick ratio | 3.05 | 2.04 | 1.37 | 2.02 | 1.59 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,118,330K
+ $34,745K
+ $578,826K)
÷ $567,976K
= 3.05
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 quick ratio above 1 indicates that a company has enough liquid assets to cover its short-term liabilities.
Looking at Ufp Industries Inc's quick ratio over the past five years, we observe a general upward trend from 2019 to 2021, with a substantial increase from 1.59 in 2019 to 1.37 in 2021. This suggests an improvement in the company's ability to cover its short-term obligations with its quick assets during this period.
However, in 2022, there was a significant drop in the quick ratio to 2.04, indicating a potential decrease in the company's liquidity position compared to the previous year. It's worth noting that a quick ratio of 2.04 is still above the ideal threshold of 1, indicating that Ufp Industries Inc maintained a strong liquidity position in 2022 despite the decline.
In 2023, the quick ratio further increased to 3.05, reflecting a substantial improvement in the company's ability to meet its short-term liabilities with its quick assets. This significant increase may indicate a strong liquidity position for Ufp Industries Inc at the end of 2023.
Overall, the trend in Ufp Industries Inc's quick ratio over the past five years suggests that the company has generally maintained a strong liquidity position, with fluctuations in certain years but ultimately showing an improvement in its ability to cover short-term obligations with liquid assets.