Watsco Inc (WSO)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 526,271 | 210,112 | 147,505 | 118,268 | 146,067 |
| Short-term investments | US$ in thousands | 255,669 | 0 | — | — | 97,847 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 983,901 | 712,012 | 906,522 | 726,722 | 499,715 |
| Quick ratio | 0.79 | 0.30 | 0.16 | 0.16 | 0.49 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($526,271K
+ $255,669K
+ $—K)
÷ $983,901K
= 0.79
Based on the data provided for Watsco Inc's Quick ratio over the years, we can observe significant fluctuations. In December 2020, the Quick ratio stood at 0.49, indicating that the company had $0.49 in liquid assets to cover each dollar of current liabilities. However, by December 2021 and 2022, the Quick ratio decreased substantially to 0.16, implying a significant liquidity strain as the company had only $0.16 in liquid assets for every dollar of current liabilities.
Interestingly, there was a slight improvement in the Quick ratio by December 2023, reaching 0.30, although it still indicated relatively low liquidity levels. Notably, by December 2024, the Quick ratio increased significantly to 0.79, showing a substantial improvement in liquidity as the company had $0.79 in liquid assets for each dollar of current liabilities.
Overall, the fluctuation in Watsco Inc's Quick ratio signals varying levels of liquidity and the company's ability to meet short-term obligations. It is crucial for stakeholders to monitor these changes to assess the company's liquidity position accurately and make informed decisions regarding its financial health.