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. KMG Chemicals's quick ratio for the quarter that ended in Jul. 2018 was 1.71.
KMG Chemicals has a quick ratio of 1.71. It generally indicates good short-term financial strength.
The historical rank and industry rank for KMG Chemicals's Quick Ratio or its related term are showing as below:
KMG's Quick Ratio is not ranked *
in the Chemicals industry.
Industry Median: 1.39 * Ranked among companies with meaningful Quick Ratio only.
KMG Chemicals Quick Ratio Historical Data
The historical data trend for KMG Chemicals'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 KMG Chemicals's Quick Ratio
For the Specialty Chemicals subindustry, KMG Chemicals'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.
KMG Chemicals's Quick Ratio Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, KMG Chemicals's Quick Ratio distribution charts can be found below:
* The bar in red indicates where KMG Chemicals's Quick Ratio falls into.
KMG Chemicals 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.
KMG Chemicals's Quick Ratio for the fiscal year that ended in Jul. 2018 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.
KMG Chemicals (NYSE:KMG) 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.
KMG Chemicals Quick Ratio Related Terms
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KMG Chemicals (KMG Chemicals) Business Description
KMG Chemicals Inc manufactures and sells a variety of chemicals and chemical-based products. The firm organizes itself into two segments based on product type. The electronic chemicals segment, which generates the majority of revenue, sells chemicals primarily to manufacturers of semiconductors. The other chemicals segment sells industrial sealants and lubricants primarily to the oil and gas storage and distribution industry as well as wood treatment chemicals used primarily to treat utility poles and cross arms. The majority of revenue comes from the United States.
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