The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Hudaco Industries's current ratio for the quarter that ended in Nov. 2023 was 2.81.
Hudaco Industries has a current ratio of 2.81. It generally indicates good short-term financial strength.
The historical rank and industry rank for Hudaco Industries's Current Ratio or its related term are showing as below:
JSE:HDC'
s Current Ratio Range Over the Past 10 Years
Min: 1.74 Med: 2.37 Max: 2.81
Current: 2.81
During the past 13 years, Hudaco Industries's highest Current Ratio was 2.81. The lowest was 1.74. And the median was 2.37.
JSE:HDC's Current Ratio is ranked better than 79.73% of 148
companies
in the Industrial Distribution industry
Industry Median: 1.895
vs JSE:HDC: 2.81
Hudaco Industries Current Ratio Historical Data
The historical data trend for Hudaco Industries's Current Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Hudaco Industries's Current Ratio
For the Industrial Distribution subindustry, Hudaco Industries's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Hudaco Industries's Current Ratio Distribution in the Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, Hudaco Industries's Current Ratio distribution charts can be found below:
* The bar in red indicates where Hudaco Industries's Current Ratio falls into.
Hudaco Industries Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Hudaco Industries's Current Ratio for the fiscal year that ended in Nov. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hudaco Industries (JSE:HDC) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Hudaco Industries Current Ratio Related Terms
Thank you for viewing the detailed overview of Hudaco Industries's Current Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Hudaco Industries Ltd is engaged in importing and distributing branded automotive, industrial and electrical consumable products. The company operates in two business segment such as Consumer-related product segment which includes power tools, security equipment, communication equipment, automotive and batteries, and Engineering consumables segment which consist of bearings, diesel engines and spares, and power transmission. It generates maximum revenue from Consumer-related product segment. Geographically, it derives a majority of revenue from South Africa.
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