Woodward Inc (WWD)
Quick ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 137,447 | 107,844 | 446,555 | 149,773 | 97,573 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 499,347 | 373,948 | 334,190 | 386,544 | 424,304 |
| Total current liabilities | US$ in thousands | 617,196 | 539,113 | 366,257 | 392,332 | 707,436 |
| Quick ratio | 1.03 | 0.89 | 2.13 | 1.37 | 0.74 |
September 30, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($137,447K
+ $—K
+ $499,347K)
÷ $617,196K
= 1.03
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term liabilities with its most liquid assets. For Woodward Inc, the quick ratio has exhibited fluctuating trends over the past five years.
In 2023, the quick ratio stood at 1.54, indicating that the company had $1.54 in liquid assets available to cover each dollar of current liabilities. This represents a slight increase from the previous year's quick ratio of 1.48. Although the ratio remains above 1, suggesting adequate short-term liquidity, the upward trend in recent years may indicate improved liquidity management.
Comparing 2023 to 2021, the quick ratio has decreased significantly from 2.85 to 1.54. This sharp decline could potentially indicate a decreased ability to cover short-term obligations with liquid assets. It would be prudent for stakeholders to assess the factors contributing to this notable change in liquidity.
In 2020, the quick ratio was 1.96, reflecting a decrease from the previous year's level. However, this figure remained above 1, signifying a healthy liquidity position. The increase from 2019's quick ratio of 1.06 to 1.96 in 2020 indicates a substantial improvement in short-term liquidity.
Overall, Woodward Inc's quick ratio has demonstrated variability in recent years, with fluctuations impacting its ability to cover short-term liabilities with liquid assets. This trend highlights the importance of closely monitoring the company's liquidity management and assessing the factors influencing these fluctuations.