Weatherford International PLC (WFRD)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 958,000 | 910,000 | 951,000 | 1,118,000 | 618,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 1,216,000 | 989,000 | 825,000 | 826,000 | 1,241,000 |
| Total current liabilities | US$ in thousands | 1,866,000 | 1,470,000 | 1,332,000 | 1,362,000 | 1,672,000 |
| Quick ratio | 1.17 | 1.29 | 1.33 | 1.43 | 1.11 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($958,000K
+ $—K
+ $1,216,000K)
÷ $1,866,000K
= 1.17
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 the company has sufficient liquid assets to cover its current liabilities.
For Weatherford International plc, the quick ratio has shown a declining trend over the past three years, decreasing from 1.56 in 2021 to 1.31 in 2023. This suggests a potential weakening in the company's short-term liquidity position over this period.
A quick ratio of 1.31 as of December 31, 2023, implies that Weatherford International plc had $1.31 in liquid assets available to cover each dollar of its current liabilities. While a quick ratio above 1 generally indicates a healthy liquidity position, the downward trend raises some concerns about the company's ability to meet its short-term obligations without relying on additional financing or asset sales.
It is recommended to further analyze Weatherford International plc's current asset composition and monitor any changes in its liquidity position to assess the company's ability to manage its short-term financial obligations effectively.
Peer comparison
Dec 31, 2023