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Walgreen Co. (WAG) | Liquidity Analysis

Liquidity ratios measure the company's ability to meet its short-term obligations.


Ratios (Summary)

Walgreen Co., liquidity ratios

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    Aug 31, 2012 Aug 31, 2011 Aug 31, 2010 Aug 31, 2009 Aug 31, 2008 Aug 31, 2007
Current ratio 1.23 1.52 1.60 1.78 1.57 1.41
Quick ratio 0.40 0.50 0.58 0.75 0.45 0.37
Cash ratio 0.15 0.19 0.25 0.38 0.07 0.04

Source: Based on data from Walgreen Co. Annual Reports

Ratio Description The company
Current ratio A liquidity ratio calculated as current assets divided by current liabilities. Walgreen Co.'s current ratio deteriorated from 2010 to 2011 and from 2011 to 2012.
Quick ratio A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. Walgreen Co.'s quick ratio deteriorated from 2010 to 2011 and from 2011 to 2012.
Cash ratio A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. Walgreen Co.'s cash ratio deteriorated from 2010 to 2011 and from 2011 to 2012.

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Current Ratio

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    Aug 31, 2012 Aug 31, 2011 Aug 31, 2010 Aug 31, 2009 Aug 31, 2008 Aug 31, 2007
  Selected Financial Data (USD $ in millions)
Current assets 10,760  12,322  11,922  12,049  10,433  9,511 
Current liabilities 8,722  8,083  7,433  6,769  6,644  6,745 
  Current Ratio, Comparison to Industry
Walgreen Co.1 1.23 1.52 1.60 1.78 1.57 1.41
  Industry, Consumer Services 1.11 1.19 1.19 1.17 1.06 –

Source: Based on data from Walgreen Co. Annual Reports

2012 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 10,760 ÷ 8,722 = 1.23

Ratio Description The company
Current ratio A liquidity ratio calculated as current assets divided by current liabilities. Walgreen Co.'s current ratio deteriorated from 2010 to 2011 and from 2011 to 2012.

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Quick Ratio

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    Aug 31, 2012 Aug 31, 2011 Aug 31, 2010 Aug 31, 2009 Aug 31, 2008 Aug 31, 2007
  Selected Financial Data (USD $ in millions)
Cash and cash equivalents 1,297  1,556  1,880  2,087  443  255 
Short-term investments – – – 500  – –
Accounts receivable, net 2,167  2,497  2,450  2,496  2,527  2,237 
Total quick assets 3,464  4,053  4,330  5,083  2,970  2,492 
Current liabilities 8,722  8,083  7,433  6,769  6,644  6,745 
  Quick Ratio, Comparison to Industry
Walgreen Co.1 0.40 0.50 0.58 0.75 0.45 0.37
  Industry, Consumer Services 0.42 0.46 0.47 0.44 0.40 –

Source: Based on data from Walgreen Co. Annual Reports

2012 Calculations

1 Quick ratio = Total quick assets ÷ Current liabilities
= 3,464 ÷ 8,722 = 0.40

Ratio Description The company
Quick ratio A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. Walgreen Co.'s quick ratio deteriorated from 2010 to 2011 and from 2011 to 2012.

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Cash Ratio

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    Aug 31, 2012 Aug 31, 2011 Aug 31, 2010 Aug 31, 2009 Aug 31, 2008 Aug 31, 2007
  Selected Financial Data (USD $ in millions)
Cash and cash equivalents 1,297  1,556  1,880  2,087  443  255 
Short-term investments – – – 500  – –
Total cash assets 1,297  1,556  1,880  2,587  443  255 
Current liabilities 8,722  8,083  7,433  6,769  6,644  6,745 
  Cash Ratio, Comparison to Industry
Walgreen Co.1 0.15 0.19 0.25 0.38 0.07 0.04
  Industry, Consumer Services 0.16 0.18 0.20 0.18 0.16 –

Source: Based on data from Walgreen Co. Annual Reports

2012 Calculations

1 Cash ratio = Total cash assets ÷ Current liabilities
= 1,297 ÷ 8,722 = 0.15

Ratio Description The company
Cash ratio A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. Walgreen Co.'s cash ratio deteriorated from 2010 to 2011 and from 2011 to 2012.

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