Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Bed Bath & Beyond Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-28), 10-K (reporting date: 2022-02-26), 10-Q (reporting date: 2021-11-27), 10-Q (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-29), 10-K (reporting date: 2021-02-27), 10-Q (reporting date: 2020-11-28), 10-Q (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-30), 10-K (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-Q (reporting date: 2019-06-01), 10-K (reporting date: 2019-03-02), 10-Q (reporting date: 2018-12-01), 10-Q (reporting date: 2018-09-01), 10-Q (reporting date: 2018-06-02), 10-K (reporting date: 2018-03-03), 10-Q (reporting date: 2017-11-25), 10-Q (reporting date: 2017-08-26), 10-Q (reporting date: 2017-05-27).
- Current Ratio Trends
- The current ratio demonstrates a general declining trend over the analyzed periods. Starting at 1.72, it fluctuated slightly above 1.5 until early 2020, indicating a relatively stable short-term liquidity position. However, from mid-2021 onward, the ratio dropped steadily, reaching a low point near 1.02 and 1.04 in the most recent quarters. This decline suggests a weakening ability to cover current liabilities with current assets, potentially signaling increasing short-term liquidity pressures.
- Quick Ratio Analysis
- The quick ratio shows considerable fluctuations with an overall downward trend toward the end of the period. Initial values hovered around 0.20 to 0.40, reflecting limited liquid assets relative to current liabilities. Notably, there was a peak in early 2020 and early 2021, reaching levels close to 0.58 to 0.59, indicating temporary improvement in liquid asset coverage. However, subsequent quarters reveal a sharp decline, falling to near 0.05 and 0.07. This pronounced decrease may indicate a significant reduction in the company's most liquid assets, raising concerns about immediate liquidity.
- Cash Ratio Behavior
- The cash ratio mirrors the quick ratio pattern exactly, implying that cash and cash equivalents constituted the primary component of liquid assets. Initial values were low, under 0.4, with some improvement observed in early 2020 and early 2021. After peaking near 0.59, this ratio declined sharply toward the end of the analysis period, dropping near 0.05 and 0.07. This sharp fall suggests a significant reduction in available cash reserves, which could constrain the company's capacity to meet short-term obligations without relying on inventory or receivables.
- Overall Liquidity Insights
- The combined analysis of the current, quick, and cash ratios portrays a weakening liquidity position over time. While the company maintained reasonable short-term asset coverage through mid-2021, the substantial decreases in liquid asset ratios and the narrowing current ratio in the final quarters point to increased liquidity risk. This may reflect operational challenges, changes in asset structure, or increased short-term liabilities, warranting close monitoring to ensure financial stability.
Current Ratio
Bed Bath & Beyond Inc., current ratio calculation (quarterly data)
| Aug 27, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | Jun 1, 2019 | Mar 2, 2019 | Dec 1, 2018 | Sep 1, 2018 | Jun 2, 2018 | Mar 3, 2018 | Nov 25, 2017 | Aug 26, 2017 | May 27, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current assets | 1,904,155) | 2,057,308) | 2,363,154) | 2,947,453) | 3,101,369) | 3,206,859) | 3,620,045) | 3,964,541) | 3,743,558) | 3,816,234) | 3,826,285) | 3,804,440) | 3,620,151) | 3,697,092) | 3,909,972) | 4,480,613) | 4,276,144) | 3,956,381) | 3,971,078) | 3,940,491) | 3,530,364) | 3,650,173) | |||||||
| Current liabilities | 1,828,468) | 2,026,455) | 2,074,787) | 2,218,963) | 2,166,766) | 2,053,498) | 2,294,921) | 2,708,455) | 2,502,539) | 2,464,037) | 2,466,526) | 2,698,043) | 2,487,110) | 2,431,082) | 2,077,632) | 2,679,028) | 2,444,017) | 2,128,067) | 2,165,685) | 2,361,067) | 1,989,020) | 2,125,019) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Current ratio1 | 1.04 | 1.02 | 1.14 | 1.33 | 1.43 | 1.56 | 1.58 | 1.46 | 1.50 | 1.55 | 1.55 | 1.41 | 1.46 | 1.52 | 1.88 | 1.67 | 1.75 | 1.86 | 1.83 | 1.67 | 1.77 | 1.72 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.95 | 0.92 | 0.94 | 0.94 | 0.95 | 0.96 | 1.14 | 1.12 | 1.20 | 1.05 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 1.18 | 1.11 | 1.01 | 1.13 | 1.06 | 1.10 | 1.23 | 1.36 | 1.30 | 1.17 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 1.11 | 1.17 | 1.02 | 1.19 | 1.16 | 1.17 | 1.19 | 1.38 | 1.30 | 1.20 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 1.17 | 1.25 | 1.27 | 1.29 | 1.33 | 1.52 | 1.46 | 1.41 | 1.51 | 2.20 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-28), 10-K (reporting date: 2022-02-26), 10-Q (reporting date: 2021-11-27), 10-Q (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-29), 10-K (reporting date: 2021-02-27), 10-Q (reporting date: 2020-11-28), 10-Q (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-30), 10-K (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-Q (reporting date: 2019-06-01), 10-K (reporting date: 2019-03-02), 10-Q (reporting date: 2018-12-01), 10-Q (reporting date: 2018-09-01), 10-Q (reporting date: 2018-06-02), 10-K (reporting date: 2018-03-03), 10-Q (reporting date: 2017-11-25), 10-Q (reporting date: 2017-08-26), 10-Q (reporting date: 2017-05-27).
1 Q2 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= 1,904,155 ÷ 1,828,468 = 1.04
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibited fluctuations over the periods analyzed. Initially, there was a gradual increase from approximately 3.65 billion USD to a peak around 4.48 billion USD by late 2018. Following this peak, a general downward trend is observed, with current assets declining steadily from early 2019 onwards, reaching about 1.90 billion USD by mid-2022. This decline suggests a reduction in liquid or short-term assets available over the last several quarters.
- Current Liabilities
- Current liabilities demonstrated variability but showed an overall increase until late 2019, reaching a high near 2.7 billion USD. After this peak, a downward trend begins, with liabilities generally decreasing to approximately 1.83 billion USD by the third quarter of 2022. This reduction in current liabilities could reflect efforts to manage or pay down short-term obligations over time.
- Current Ratio
- The current ratio started above 1.7, indicating a relatively strong liquidity position in early periods. During 2017 and early 2018, the ratio fluctuated around 1.7 to 1.86, signifying a stable ability to cover short-term liabilities with current assets. However, starting from 2019, a noticeable declining trend emerges, with the ratio dropping below 1.5, and further deteriorating to near or slightly above 1.0 by 2022. This decline signals a weakening liquidity position and a reduced margin of safety in meeting short-term obligations.
- Overall Analysis
- The financial data reflect a company experiencing diminishing liquidity and current asset availability over the analyzed quarters. Although current liabilities have decreased somewhat in recent periods, the fall in current assets is more pronounced, contributing to the erosion of the current ratio. The trend points to increasing pressure on working capital, which may warrant close monitoring and possible strategic adjustments to improve short-term financial stability.
Quick Ratio
Bed Bath & Beyond Inc., quick ratio calculation (quarterly data)
| Aug 27, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | Jun 1, 2019 | Mar 2, 2019 | Dec 1, 2018 | Sep 1, 2018 | Jun 2, 2018 | Mar 3, 2018 | Nov 25, 2017 | Aug 26, 2017 | May 27, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 135,270) | 107,543) | 439,496) | 509,054) | 970,592) | 1,097,267) | 1,352,984) | 1,462,612) | 1,441,845) | 1,120,974) | 1,000,340) | 900,077) | 983,847) | 700,389) | 508,971) | 762,513) | 869,297) | 678,646) | 346,140) | 453,103) | 464,062) | 469,320) | |||||||
| Short-term investment securities | —) | —) | —) | —) | 29,999) | 29,997) | —) | —) | —) | 29,485) | 385,642) | —) | —) | 201,664) | 485,799) | 238,267) | 205,916) | 148,313) | 378,039) | —) | —) | —) | |||||||
| Accounts receivable | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Total quick assets | 135,270) | 107,543) | 439,496) | 509,054) | 1,000,591) | 1,127,264) | 1,352,984) | 1,462,612) | 1,441,845) | 1,150,459) | 1,385,982) | 900,077) | 983,847) | 902,053) | 994,770) | 1,000,780) | 1,075,213) | 826,959) | 724,179) | 453,103) | 464,062) | 469,320) | |||||||
| Current liabilities | 1,828,468) | 2,026,455) | 2,074,787) | 2,218,963) | 2,166,766) | 2,053,498) | 2,294,921) | 2,708,455) | 2,502,539) | 2,464,037) | 2,466,526) | 2,698,043) | 2,487,110) | 2,431,082) | 2,077,632) | 2,679,028) | 2,444,017) | 2,128,067) | 2,165,685) | 2,361,067) | 1,989,020) | 2,125,019) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Quick ratio1 | 0.07 | 0.05 | 0.21 | 0.23 | 0.46 | 0.55 | 0.59 | 0.54 | 0.58 | 0.47 | 0.56 | 0.33 | 0.40 | 0.37 | 0.48 | 0.37 | 0.44 | 0.39 | 0.33 | 0.19 | 0.23 | 0.22 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.43 | 0.44 | 0.45 | 0.42 | 0.43 | 0.48 | 0.68 | 0.64 | 0.76 | 0.63 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 0.18 | 0.22 | 0.20 | 0.32 | 0.30 | 0.37 | 0.47 | 0.68 | 0.69 | 0.48 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 0.09 | 0.17 | 0.07 | 0.32 | 0.29 | 0.31 | 0.28 | 0.52 | 0.60 | 0.34 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.40 | 0.49 | 0.64 | 0.65 | 0.77 | 0.95 | 1.01 | 0.93 | 0.92 | 0.96 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-28), 10-K (reporting date: 2022-02-26), 10-Q (reporting date: 2021-11-27), 10-Q (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-29), 10-K (reporting date: 2021-02-27), 10-Q (reporting date: 2020-11-28), 10-Q (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-30), 10-K (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-Q (reporting date: 2019-06-01), 10-K (reporting date: 2019-03-02), 10-Q (reporting date: 2018-12-01), 10-Q (reporting date: 2018-09-01), 10-Q (reporting date: 2018-06-02), 10-K (reporting date: 2018-03-03), 10-Q (reporting date: 2017-11-25), 10-Q (reporting date: 2017-08-26), 10-Q (reporting date: 2017-05-27).
1 Q2 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 135,270 ÷ 1,828,468 = 0.07
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations in the company's liquidity position over the analyzed periods. The total quick assets demonstrate a generally increasing trend from May 2017 through early 2020, peaking significantly in the first quarter of 2020. After this peak, the quick assets show a decreasing trajectory, with a sharp decline observed from early 2021 onwards, reaching notably low levels by the latter part of 2022.
Conversely, current liabilities exhibit variability but maintain a relatively high range throughout the periods. There is a noticeable increase in current liabilities toward the end of 2018, followed by periodic fluctuations. While some decreases are apparent in 2021 and 2022, the level of liabilities remains substantial relative to quick assets.
The quick ratio, which measures immediate liquidity, mirrors the trends seen in quick assets and current liabilities. It starts low in mid-2017, improves steadily to a peak near early 2021, indicating better short-term liquidity during this period. However, the ratio falls dramatically in 2022, highlighting a marked deterioration in the ability to cover current liabilities with quick assets. The lowest points in the quick ratio suggest potential liquidity stress in recent quarters.
- Quick Assets
- Initially increase significantly, peaking in early 2020, followed by a consistent decline through 2022.
- Current Liabilities
- Remain high with fluctuations, peaking near the end of 2018 and maintaining elevated levels thereafter.
- Quick Ratio
- Improves from 0.22 in mid-2017 to almost 0.59 in early 2021, then deteriorates sharply to as low as 0.05 by late 2022.
Overall, the analysis indicates that the company had improved liquidity conditions up to early 2021 but faced increasing liquidity challenges during 2022. The rapid decline in the quick ratio toward the end of the period signals a potential risk in meeting short-term obligations, warranting close monitoring and possibly corrective financial management actions.
Cash Ratio
Bed Bath & Beyond Inc., cash ratio calculation (quarterly data)
| Aug 27, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | Jun 1, 2019 | Mar 2, 2019 | Dec 1, 2018 | Sep 1, 2018 | Jun 2, 2018 | Mar 3, 2018 | Nov 25, 2017 | Aug 26, 2017 | May 27, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 135,270) | 107,543) | 439,496) | 509,054) | 970,592) | 1,097,267) | 1,352,984) | 1,462,612) | 1,441,845) | 1,120,974) | 1,000,340) | 900,077) | 983,847) | 700,389) | 508,971) | 762,513) | 869,297) | 678,646) | 346,140) | 453,103) | 464,062) | 469,320) | |||||||
| Short-term investment securities | —) | —) | —) | —) | 29,999) | 29,997) | —) | —) | —) | 29,485) | 385,642) | —) | —) | 201,664) | 485,799) | 238,267) | 205,916) | 148,313) | 378,039) | —) | —) | —) | |||||||
| Total cash assets | 135,270) | 107,543) | 439,496) | 509,054) | 1,000,591) | 1,127,264) | 1,352,984) | 1,462,612) | 1,441,845) | 1,150,459) | 1,385,982) | 900,077) | 983,847) | 902,053) | 994,770) | 1,000,780) | 1,075,213) | 826,959) | 724,179) | 453,103) | 464,062) | 469,320) | |||||||
| Current liabilities | 1,828,468) | 2,026,455) | 2,074,787) | 2,218,963) | 2,166,766) | 2,053,498) | 2,294,921) | 2,708,455) | 2,502,539) | 2,464,037) | 2,466,526) | 2,698,043) | 2,487,110) | 2,431,082) | 2,077,632) | 2,679,028) | 2,444,017) | 2,128,067) | 2,165,685) | 2,361,067) | 1,989,020) | 2,125,019) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Cash ratio1 | 0.07 | 0.05 | 0.21 | 0.23 | 0.46 | 0.55 | 0.59 | 0.54 | 0.58 | 0.47 | 0.56 | 0.33 | 0.40 | 0.37 | 0.48 | 0.37 | 0.44 | 0.39 | 0.33 | 0.19 | 0.23 | 0.22 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.43 | 0.44 | 0.45 | 0.42 | 0.43 | 0.48 | 0.68 | 0.64 | 0.76 | 0.63 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 0.05 | 0.09 | 0.08 | 0.19 | 0.17 | 0.24 | 0.34 | 0.58 | 0.58 | 0.37 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 0.09 | 0.17 | 0.07 | 0.32 | 0.29 | 0.31 | 0.28 | 0.52 | 0.60 | 0.34 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.35 | 0.43 | 0.59 | 0.60 | 0.71 | 0.89 | 0.97 | 0.90 | 0.87 | 0.92 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-28), 10-K (reporting date: 2022-02-26), 10-Q (reporting date: 2021-11-27), 10-Q (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-29), 10-K (reporting date: 2021-02-27), 10-Q (reporting date: 2020-11-28), 10-Q (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-30), 10-K (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-Q (reporting date: 2019-06-01), 10-K (reporting date: 2019-03-02), 10-Q (reporting date: 2018-12-01), 10-Q (reporting date: 2018-09-01), 10-Q (reporting date: 2018-06-02), 10-K (reporting date: 2018-03-03), 10-Q (reporting date: 2017-11-25), 10-Q (reporting date: 2017-08-26), 10-Q (reporting date: 2017-05-27).
1 Q2 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 135,270 ÷ 1,828,468 = 0.07
2 Click competitor name to see calculations.
- Cash Assets Trend
- Over the analyzed periods, total cash assets exhibited considerable fluctuations. Initially, cash assets showed a moderate decline from approximately $469 million to $453 million within 2017. In early 2018, there was a notable increase, peaking at over $1 billion by September 2018. This upward momentum was sustained until early 2020, with cash assets reaching a maximum of around $1.46 billion. However, starting in mid-2021, a sharp decline occurred, culminating in cash assets dropping drastically to approximately $107 million by August 2022. This volatility indicates varying liquidity positions, with cash reserves significantly bolstered during certain periods but substantially depleted later.
- Current Liabilities Trend
- Current liabilities showed a general upward trajectory from $2.13 billion in mid-2017 to a peak near $2.7 billion by late 2019. After this peak, liabilities fluctuated but largely remained around the $2.4 billion to $2.7 billion range through early 2021. Post-2021, a gradual reduction trend is identified, dropping to about $1.83 billion by August 2022. The sustained high level of liabilities for an extended period reflects considerable short-term obligations, while the subsequent decrease may indicate efforts to reduce outstanding liabilities or operational adjustments.
- Cash Ratio Analysis
- The cash ratio, which measures liquidity by comparing cash assets to current liabilities, varied considerably over the timeframe. The ratio started low, around 0.22, and displayed an upward trend reaching highs near 0.59 in early 2021. This peak suggests substantially improved liquidity during that period. However, from mid-2021 onward, the ratio plummeted sharply, reaching critically low levels of 0.05 and 0.07 by the latest periods, implying severely constrained liquidity relative to short-term obligations.
- Overall Insights
- The data reveals a period of liquidity strengthening from early 2018 through early 2021, characterized by increasing cash assets and improved cash ratios, despite persistently high current liabilities. This suggests effective cash management or potential cash inflows during those years. In contrast, the sharp declines in both cash assets and cash ratio after mid-2021, alongside the reductions in current liabilities, indicate tightened liquidity conditions. The low cash ratio values toward the end of the period highlight increased risk in meeting short-term liabilities purely from cash reserves, warranting close monitoring and potentially necessitating additional liquidity measures.