Yum! Brands Inc (YUM)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 512,000 | 367,000 | 486,000 | 730,000 | 605,000 |
| Short-term investments | US$ in thousands | 24,000 | 26,000 | — | — | 6,000 |
| Receivables | US$ in thousands | 757,000 | 680,000 | 646,000 | 569,000 | 623,000 |
| Total current liabilities | US$ in thousands | 1,277,000 | 1,665,000 | 1,415,000 | 1,675,000 | 1,541,000 |
| Quick ratio | 1.01 | 0.64 | 0.80 | 0.78 | 0.80 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($512,000K
+ $24,000K
+ $757,000K)
÷ $1,277,000K
= 1.01
The quick ratio, also known as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets. A quick ratio of 1 or higher is generally considered healthy as it indicates that the company's liquid assets are sufficient to cover its current liabilities.
Based on the data provided for Yum Brands Inc., we observe fluctuations in the quick ratio over the past five years. In 2023, the quick ratio improved to 1.12 from 0.72 in 2022, showing a significant increase in the company's ability to meet its short-term obligations using its quick assets.
This improvement could be attributed to factors such as better management of current assets, efficient inventory management, or a reduction in short-term liabilities. It suggests that Yum Brands Inc. may have a more secure financial position in terms of liquidity in 2023 compared to the previous year.
When compared to the ratios in 2021, 2020, and 2019, the quick ratio in 2023 is also notably higher, indicating a positive trend in the company's liquidity management over the years.
Overall, the quick ratio of Yum Brands Inc. has shown improvement in 2023, reflecting positively on its ability to meet short-term obligations using its quick assets.
Peer comparison
Dec 31, 2023