The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated as a company's Total Current Assets excludes Total Inventories divides by its Total Current Liabilities. Zip Co's quick ratio for the quarter that ended in Dec. 2023 was 8.64.
Zip Co has a quick ratio of 8.64. It generally indicates good short-term financial strength.
The historical rank and industry rank for Zip Co's Quick Ratio or its related term are showing as below:
FRA:YRRA'
s Quick Ratio Range Over the Past 10 Years
Min: 1.15 Med: 4.61 Max: 51.95
Current: 8.64
During the past 13 years, Zip Co's highest Quick Ratio was 51.95. The lowest was 1.15. And the median was 4.61.
FRA:YRRA's Quick Ratio is ranked better than 53.87% of 375
companies
in the Credit Services industry
Industry Median: 4.79
vs FRA:YRRA: 8.64
Zip Co Quick Ratio Historical Data
The historical data trend for Zip Co's Quick 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.
For the Credit Services subindustry, Zip Co's Quick Ratio, along with its competitors' market caps and Quick 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.
Zip Co's Quick Ratio Distribution in the Credit Services Industry
For the Credit Services industry and Financial Services sector, Zip Co's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Zip Co's Quick Ratio falls into.
Zip Co Quick Ratio Calculation
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets.
Zip Co's Quick Ratio for the fiscal year that ended in Jun. 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.
Zip Co (FRA:YRRA) Quick Ratio Explanation
The quick ratio is more conservative than the Current Ratio because it excludes inventories from current assets. The ratio derives its name presumably from the fact that assets such as cash and marketable securities are quick sources of cash. Inventories generally take time to be converted into cash, and if they have to be sold quickly, the company may have to accept a lower price than book value of these inventories. As a result, they are justifiably excluded from assets that are ready sources of immediate cash.
In general, low or decreasing quick ratios generally suggest that a company is over-leveraged, struggling to maintain or grow sales, paying bills too quickly or collecting receivables too slowly. On the other hand, a high or increasing quick ratio generally indicates that a company is experiencing solid top-line growth, quickly converting receivables into cash, and easily able to cover its financial obligations. Such companies often have faster inventory turnover and cash conversion cycles.
The higher the quick ratio, the better the company's liquidity position.
Zip Co Quick Ratio Related Terms
Thank you for viewing the detailed overview of Zip Co's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Zip is a diversified finance provider, offering consumer financing via a line of credit (via Zip Pay and Zip Money) and instalment-based finance (via QuadPay, Spotii, Twisto, and PayFlex); as well as lending to small to midsize enterprises (via Zip Business). Zip's fortunes are largely tied to the buy now, pay later, or BNPL, industry. Most of its products—Zip Pay, QuadPay (Zip U.S.), and PayFlex—do not charge interest based on outstanding balances. Around 60%-70% of Zip Pay's/Zip Money's revenue is derived from customers, mainly via account fees and interest. Meanwhile, its instalment businesses primarily generate revenue by receiving a margin from merchants, which compensates it for accepting all nonpayment risk and for encouraging consumers to transact more frequently.
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