Waste Management Inc (WM)
Quick ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 458,000 | 150,000 | 144,000 | 257,000 | 351,000 | 137,000 | 894,000 | 155,000 | 118,000 | 116,000 | 148,000 | 476,000 | 553,000 | 703,000 | 2,663,000 | 3,125,000 | 3,561 | 2,915,000 | 2,250,000 | 57,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | — | — | 402,000 | 417,000 | 426,000 | 314,000 | 425,000 | — | — | 377,000 | — | — | — |
| Receivables | US$ in thousands | 2,870,000 | 2,917,000 | 2,846,000 | 2,608,000 | 2,752,000 | 2,676,000 | 2,665,000 | 2,479,000 | 2,546,000 | 2,669,000 | 2,645,000 | 2,427,000 | 2,624,000 | 2,217,000 | 2,107,000 | 2,662,000 | 1,949,000 | 2,010,000 | 2,017,000 | 1,830,000 |
| Total current liabilities | US$ in thousands | 4,226,000 | 4,218,000 | 4,251,000 | 3,856,000 | 4,394,000 | 3,834,000 | 3,722,000 | 3,806,000 | 4,082,000 | 4,102,000 | 3,683,000 | 3,285,000 | 3,553,000 | 2,806,000 | 5,772,000 | 3,070,000 | 3,144,000 | 2,989,000 | 2,846,000 | 3,612,000 |
| Quick ratio | 0.79 | 0.73 | 0.70 | 0.74 | 0.71 | 0.73 | 0.96 | 0.69 | 0.65 | 0.78 | 0.87 | 1.01 | 0.98 | 1.19 | 0.83 | 1.89 | 0.74 | 1.65 | 1.50 | 0.52 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($458,000K
+ $—K
+ $2,870,000K)
÷ $4,226,000K
= 0.79
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 covering its current liabilities with its quick assets.
In the case of Waste Management, Inc., the quick ratio has fluctuated over the past eight quarters, ranging from a low of 0.76 to a high of 1.03. In Q4 2023, the quick ratio was 0.86, a slight improvement from the previous quarter but still below the ideal threshold of 1. This suggests that Waste Management may face challenges in meeting its short-term obligations using its quick assets alone.
It is noteworthy that the quick ratio improved significantly in Q2 2022 when it reached 1.03, indicating a strong ability to cover short-term liabilities with quick assets at that time. However, the ratio dropped in subsequent quarters before recovering slightly in Q4 2023.
Overall, the trend in Waste Management's quick ratio shows some variability, which may be influenced by factors such as changes in liquidity, inventory management, or payment terms. Further analysis of the company's cash flow and working capital management practices would be beneficial to better understand its ability to meet short-term obligations.
Peer comparison
Dec 31, 2023