Advanced Drainage Systems Inc (WMS)
Current ratio
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 1,324,780 | 1,299,970 | 1,017,490 | 871,898 | 742,978 |
| Total current liabilities | US$ in thousands | 398,396 | 439,622 | 378,802 | 391,241 | 318,270 |
| Current ratio | 3.33 | 2.96 | 2.69 | 2.23 | 2.33 |
March 31, 2025 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,324,780K ÷ $398,396K
= 3.33
Based on the data provided, Advanced Drainage Systems Inc's current ratio has exhibited a generally increasing trend over the past five years. The current ratio, which indicates the company's ability to cover its short-term liabilities with its current assets, improved consistently from 2.33 as of March 31, 2021, to 3.33 as of March 31, 2025.
This upward trend suggests that the company has been effectively managing its current assets and liabilities, resulting in a stronger liquidity position. A current ratio above 1 indicates that the company has more than enough current assets to cover its current liabilities, with higher ratios indicating a greater ability to meet short-term obligations.
The company's current ratio exceeding 3 as of March 31, 2025, indicates a robust liquidity position, potentially providing flexibility in meeting operational needs, debt obligations, or taking advantage of investment opportunities. However, it is essential to consider the industry norms and specific business circumstances before drawing definitive conclusions about the financial health of Advanced Drainage Systems Inc based solely on the current ratio.