Advanced Drainage Systems Inc (WMS)
Quick ratio
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 463,319 | 490,163 | 217,128 | 20,125 | 195,009 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 314,011 | 323,576 | 306,945 | 341,753 | 236,191 |
| Total current liabilities | US$ in thousands | 398,396 | 439,622 | 378,802 | 391,241 | 318,270 |
| Quick ratio | 1.95 | 1.85 | 1.38 | 0.92 | 1.35 |
March 31, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($463,319K
+ $—K
+ $314,011K)
÷ $398,396K
= 1.95
The quick ratio of Advanced Drainage Systems Inc has shown fluctuations over the past five years. As of March 31, 2021, the quick ratio was 1.35, indicating that the company had $1.35 in liquid assets available to cover each dollar of current liabilities.
However, by March 31, 2022, the quick ratio decreased to 0.92, which may raise concerns as it suggests a decrease in the company's ability to meet its short-term obligations with its most liquid assets.
In the following years, the quick ratio improved, reaching 1.38 by March 31, 2023, 1.85 by March 31, 2024, and further improving to 1.95 by March 31, 2025. These increases indicate a stronger liquidity position, with the company having more liquid assets to cover its short-term liabilities.
Overall, the increasing trend in the quick ratio over the years suggests an improved ability of Advanced Drainage Systems Inc to meet its short-term obligations with its quick assets. However, it is essential for the company to continue monitoring and managing its liquidity position to ensure financial stability and meet obligations in a timely manner.