Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
AutoZone Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17).
- Current Ratio Analysis
- The current ratio exhibited moderate fluctuations over the observed period, starting near 0.93 and generally hovering around the 0.9 mark in the initial quarters. A notable increase was observed around mid-2020, with the ratio peaking above 1.0, indicating a temporary improvement in short-term liquidity. However, from late 2021 onward, the current ratio showed a declining trend, stabilizing just below 0.8 in the most recent quarters. This suggests a gradual reduction in the ability to cover short-term liabilities with current assets.
- Quick Ratio Analysis
- The quick ratio remained consistently low throughout the timeline, mostly staying below 0.1 until early 2020. A significant, albeit temporary, spike occurred around mid-2020, with the ratio increasing sharply to above 0.3, suggesting a transient boost in liquid assets excluding inventory. Following this period, the quick ratio reverted to approximately 0.09, maintaining this level through the subsequent quarters. This pattern indicates that, apart from the mid-2020 anomaly, liquid assets were relatively limited in comparison to current liabilities.
- Cash Ratio Analysis
- The cash ratio mirrored the behavior of the quick ratio, displaying low levels around 0.03 to 0.05 initially. An abrupt increase was noted in mid-2020, with values approaching 0.28, reflecting a short-term surge in cash and cash equivalents relative to current liabilities. Post this juncture, the ratio declined sharply and stabilized back to the lower range of about 0.03. This implies that the company's immediate cash reserves were generally minimal except for a brief period of strengthened liquidity.
- Overall Liquidity Insights
- The financial ratios collectively indicate a period of improved liquidity in mid-2020, which may correspond to strategic cash management or changes in working capital during that time. However, aside from this brief interval, liquidity ratios remained relatively constrained, with current, quick, and cash ratios all reflecting limited short-term asset buffers against liabilities. The downward trend in the current ratio from late 2021 suggests increasing pressure on working capital management or a shift toward higher current liabilities relative to current assets.
Current Ratio
AutoZone Inc., current ratio calculation (quarterly data)
| Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | ||||||||
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| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Current ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Amazon.com Inc. | ||||||||||||||||||||||||||||
| Home Depot Inc. | ||||||||||||||||||||||||||||
| Lowe’s Cos. Inc. | ||||||||||||||||||||||||||||
| TJX Cos. Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17).
1 Q1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets Trend
- Current assets demonstrated a generally increasing pattern over the observed periods, starting at approximately 4.81 billion US dollars and rising to nearly 6.96 billion US dollars by the final date. Notably, there was a marked increase in the middle of 2020, where current assets jumped substantially from around 5.4 billion to over 6.8 billion US dollars, suggesting an accumulation of liquid or short-term assets during that phase. Following this peak, current assets fluctuated moderately but remained elevated relative to the earlier periods.
- Current Liabilities Trend
- Current liabilities showed an upward trajectory throughout the timeline, increasing from approximately 5.17 billion US dollars to about 8.79 billion US dollars by the end period. The growth in current liabilities was relatively consistent, with intermittent periods of sharper increases, particularly from late 2020 onward. This suggests a rising level of short-term obligations, which could potentially indicate increased operational activities or greater reliance on short-term financing.
- Current Ratio Analysis
- The current ratio started slightly below 1, at 0.93, and fluctuated within a narrow range over the periods but generally trended downward until early 2022 when it reached a low around 0.77. A brief increase was observed in mid-2020, coinciding with the significant rise in current assets, elevating the ratio above 1.08. However, afterward, the ratio declined again, hovering near 0.79 toward the end of the timeline. This overall decrease in the current ratio indicates a weakening short-term liquidity position, as increases in current liabilities outpaced the growth of current assets, potentially signalling tighter liquidity conditions or higher working capital requirements.
- Summary of Liquidity Position
- While current assets increased over time, the more rapid and consistent rise in current liabilities led to a declining current ratio, illustrating a relative reduction in the company's ability to cover short-term liabilities with short-term assets. The temporary improvement seen in mid-2020 likely reflects specific operational or financial adjustments during that period, but the subsequent downward trend points to heightened liquidity risk. Continuous monitoring of these trends is advised, particularly because the current ratio remained below the generally accepted benchmark of 1 for most of the timeframe, indicating potential liquidity constraints.
Quick Ratio
AutoZone Inc., quick ratio calculation (quarterly data)
| Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | ||||||||
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| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||
| Accounts receivable | ||||||||||||||||||||||||||||
| Total quick assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Quick ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Amazon.com Inc. | ||||||||||||||||||||||||||||
| Home Depot Inc. | ||||||||||||||||||||||||||||
| Lowe’s Cos. Inc. | ||||||||||||||||||||||||||||
| TJX Cos. Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17).
1 Q1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Trend in Total Quick Assets
- The total quick assets exhibit a fluctuating pattern over the reported periods. Initially, there is a downward trend from November 2018 through May 2019, followed by a moderate increase until February 2020. A significant spike is observed in August 2020, reaching the highest value in the series, nearly tripling compared to earlier quarters. Post this peak, total quick assets decline sharply but stabilize around a range between 640,000 and 800,000 US$ thousands from early 2022 onwards, showing moderate growth toward the end of the period.
- Trend in Current Liabilities
- Current liabilities have consistently increased over the entire time span, starting from approximately 5.17 million US$ thousands in late 2018 and trending upwards to nearly 8.79 million US$ thousands by the end of 2023. Despite some minor fluctuations, the overall trajectory is clearly upward, indicating increasing short-term obligations.
- Trend in Quick Ratio
- The quick ratio remains low throughout the periods, generally below or around 0.1 in the early quarters of 2019, indicating limited liquidity in relation to current liabilities. A notable increase occurs starting May 2020, where the ratio rises sharply to 0.13, peaking at 0.34 in August 2020. This peak corresponds with the surge in total quick assets during the same quarter. Following this peak, the quick ratio decreases and stabilizes at around 0.09 from early 2022 to the end of 2023, consistent with the pattern of total quick assets and continued growth in current liabilities.
- Overall Financial Insights
- The company shows a consistent and significant increase in current liabilities throughout the period measured, nearly doubling over five years. Meanwhile, total quick assets fluctuate and include a notable anomaly in August 2020, which may represent an isolated event or temporary liquidity boost. Despite this temporary increase in assets and corresponding rise in quick ratio, liquidity levels remain relatively low, as reflected by the quick ratio primarily remaining below 0.1. The stability in quick ratio at this low level in recent periods suggests ongoing challenges in short-term liquidity management relative to liabilities.
Cash Ratio
AutoZone Inc., cash ratio calculation (quarterly data)
| Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||
| Total cash assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Cash ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Amazon.com Inc. | ||||||||||||||||||||||||||||
| Home Depot Inc. | ||||||||||||||||||||||||||||
| Lowe’s Cos. Inc. | ||||||||||||||||||||||||||||
| TJX Cos. Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17).
1 Q1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited significant fluctuations over the analyzed quarters. Starting from approximately $252 million, cash assets declined steadily until early 2020, reaching around $153 million. A pronounced increase occurred in the mid-2020 period, peaking at over $1.75 billion, followed by a slight decline and stabilization near $1 billion by early 2021. Subsequently, cash assets dropped sharply in early 2022 to roughly $239 million and then remained relatively stable, fluctuating moderately around $260 to $300 million through to the end of the analyzed period in late 2023.
- Current Liabilities
- Current liabilities demonstrated a consistent upward trend throughout the periods reviewed. Beginning at about $5.17 billion in late 2018, the liabilities gradually increased with minor fluctuations, reaching approximately $8.79 billion by the end of 2023. The growth in current liabilities appears steady without abrupt spikes, indicating a continuous expansion in short-term obligations.
- Cash Ratio
- The cash ratio values reflected notable variability corresponding to the changes in cash assets and current liabilities. Initially, the ratio remained low, between 0.03 and 0.05, denoting a minimal amount of cash relative to current liabilities. A significant peak occurred in mid-2020, when the ratio rose sharply to a high of 0.28, aligning with the surge in cash holdings during the same period. Afterwards, the cash ratio declined back to approximately 0.03 by early 2022 and maintained this low level consistently through the last periods analyzed. This pattern suggests a temporary enhancement in liquidity during mid-2020, which then reverted to a lower liquidity position in subsequent quarters.
- Overall Insights
- The financial data indicates a strong increase in cash assets and liquidity metrics around mid-2020, likely reflecting strategic actions or external factors requiring increased cash reserves or inflows. Despite this temporary boost, both cash and liquidity relative to short-term liabilities returned to prior, lower levels, while current liabilities continued to grow steadily. The steady rise in liabilities alongside stable, low liquidity may suggest increasing short-term financial obligations relative to readily available cash, which could impact the company’s ability to meet immediate liabilities without resorting to other sources of working capital.