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. Covanta Holding's quick ratio for the quarter that ended in Sep. 2021 was 0.89.
Covanta Holding has a quick ratio of 0.89. It indicates that the company cannot currently fully pay back its current liabilities.
The historical rank and industry rank for Covanta Holding's Quick Ratio or its related term are showing as below:
CVA's Quick Ratio is not ranked *
in the Waste Management industry.
Industry Median: 1.28 * Ranked among companies with meaningful Quick Ratio only.
Covanta Holding Quick Ratio Historical Data
The historical data trend for Covanta Holding'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.
Competitive Comparison of Covanta Holding's Quick Ratio
For the Waste Management subindustry, Covanta Holding'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.
Covanta Holding's Quick Ratio Distribution in the Waste Management Industry
For the Waste Management industry and Industrials sector, Covanta Holding's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Covanta Holding's Quick Ratio falls into.
Covanta Holding 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.
Covanta Holding's Quick Ratio for the fiscal year that ended in Dec. 2020 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.
Covanta Holding (NYSE:CVA) 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.
Covanta Holding Quick Ratio Related Terms
Thank you for viewing the detailed overview of Covanta Holding's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Covanta Holding (Covanta Holding) Business Description
Covanta Holding Corp is a holding company engaged in the businesses of waste and energy services. It is engaged in the conversion of waste to energy, as well as other waste disposal and renewable energy production businesses. The firm generates its income in the form of waste and service revenue, energy revenue, recycled metals revenue, and other operating income. Geographically, the company operates in the United States.
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