World Kinect Corporation (WKC)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 304,300 | 298,400 | 652,200 | 658,800 | 186,100 |
| Short-term investments | US$ in thousands | — | — | — | — | 59,500 |
| Receivables | US$ in thousands | 2,700,000 | 3,294,100 | 2,355,300 | 1,238,400 | 2,891,900 |
| Total current liabilities | US$ in thousands | 4,049,700 | 4,608,600 | 3,096,700 | 1,684,000 | 3,162,400 |
| Quick ratio | 0.74 | 0.78 | 0.97 | 1.13 | 0.99 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($304,300K
+ $—K
+ $2,700,000K)
÷ $4,049,700K
= 0.74
The quick ratio of World Kinect Corp has fluctuated over the past five years, ranging from 1.36 in 2020 to 0.95 in 2023. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A higher ratio indicates a stronger liquidity position, as the company has more liquid assets relative to current liabilities.
In 2023, the quick ratio decreased to 0.95, implying a slight deterioration in the company's ability to cover its short-term liabilities with its quick assets. This may raise concerns about the company's liquidity in the short term. However, it is important to note that the quick ratio of 0.95 is still above 1, which generally indicates that the company can meet its short-term obligations.
Comparing the quick ratio to previous years, we see a downward trend since 2020, where the quick ratio was at its highest at 1.36. This may indicate a decrease in the company's liquidity position over the years. Management should closely monitor the trend in the quick ratio to ensure the company maintains an adequate level of liquidity to meet its short-term obligations.