United Natural Foods Inc (UNFI)
Quick ratio
| Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Aug 1, 2020 | Aug 3, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 37,000 | 44,000 | 41,000 | 47,000 | 44,468 |
| Short-term investments | US$ in thousands | 17,000 | 3,000 | — | — | 389 |
| Receivables | US$ in thousands | 908,000 | 1,233,000 | 1,119,000 | 1,139,630 | 1,088,960 |
| Total current liabilities | US$ in thousands | 2,405,000 | 2,417,000 | 2,487,000 | 2,370,000 | 2,108,940 |
| Quick ratio | 0.40 | 0.53 | 0.47 | 0.50 | 0.54 |
July 29, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($37,000K
+ $17,000K
+ $908,000K)
÷ $2,405,000K
= 0.40
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. It is calculated by dividing quick assets (such as cash, marketable securities, and accounts receivable) by current liabilities.
Looking at United Natural Foods Inc.'s quick ratio over the past five years, we can observe a fluctuating trend. In July 2023, the quick ratio stood at 0.49, indicating that for every $1 of current liabilities, the company had $0.49 in quick assets to cover those obligations. This represents a decline from the previous year's quick ratio of 0.60.
The decreasing quick ratio may signify potential liquidity concerns for the company, as it suggests a lower ability to meet short-term obligations using its most liquid assets. It could also indicate a potential increase in current liabilities or a decrease in quick assets.
Comparing the 2023 quick ratio with historical data, we see a similar pattern in 2021, where the quick ratio was 0.52, and in 2020, when it was 0.60. However, in 2019, the company had a slightly higher quick ratio of 0.63.
This downward trend in the quick ratio warrants further investigation into the company's liquidity management, efficiency of accounts receivable collection, and overall financial health. It's essential to closely monitor liquidity ratios like the quick ratio, as they provide insights into a company's ability to meet its short-term financial obligations.
Peer comparison
Jul 29, 2023