The Wendy’s Co (WEN)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 450,512 | 516,037 | 745,889 | 249,438 | 306,989 |
| Short-term investments | US$ in thousands | — | — | — | — | 44,574 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 397,631 | 381,930 | 387,999 | 426,925 | 413,308 |
| Quick ratio | 1.13 | 1.35 | 1.92 | 0.58 | 0.85 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($450,512K
+ $—K
+ $—K)
÷ $397,631K
= 1.13
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 of less than 1 indicates that a company may have difficulty meeting its short-term liabilities without having to sell inventory.
The quick ratio of The Wendy's Co has shown varying trends over the years. As of December 31, 2020, the quick ratio was 0.85, indicating that the company had less than $1 in liquid assets to cover each dollar of current liabilities. This could signal potential liquidity concerns.
The quick ratio improved significantly to 1.92 as of December 31, 2022, suggesting that the company had a healthy liquidity position at that time. A quick ratio above 1 implies that the company can fully cover its short-term obligations with its liquid assets.
However, the quick ratio decreased to 0.58 by December 31, 2021, and then slightly recovered to 1.35 by December 31, 2023, before declining again to 1.13 by December 31, 2024. These fluctuations indicate potential volatility in the company's liquidity position.
Overall, while the company experienced fluctuations in its quick ratio over the years, it has managed to maintain a ratio above 1 in most periods, indicating a reasonable ability to meet its short-term obligations with liquid assets. Investors and analysts should continue to monitor the quick ratio to ensure the company's liquidity remains stable.
Peer comparison
Dec 31, 2024