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Western Digital Corp (NAS:WDC)
Quick Ratio
1.88 (As of Mar. 2014)

The current 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 Inventory divides by its Total Current Liabilities. Western Digital Corp's quick ratio for the quarter that ended in Mar. 2014 was 1.88.

Western Digital Corp has a quick ratio of 1.88. It generally indicates good short-term financial strength.

WDC' s 10-Year Quick Ratio Range
Min: 0.55   Max: 3.18
Current: 1.88

0.55
3.18

During the past 13 years, Western Digital Corp's highest Quick Ratio was 3.18. The lowest was 0.55. And the median was 1.36.

WDC's Quick Ratiois ranked higher than
73% of the 2532 Companies
in the Global Data Storage industry.

( Industry Median: 1.44 vs. WDC: 1.88 )

Definition

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.

Western Digital Corp's Quick Ratio for the fiscal year that ended in Jun. 2013 is calculated as

Quick Ratio (A: Jun. 2013 )=(Total Current Assets-Inventory)/Total Current Liabilities
=(7598-1188)/3973
=1.61

Western Digital Corp's Quick Ratio for the quarter that ended in Mar. 2014 is calculated as

Quick Ratio (Q: Mar. 2014 )=(Total Current Assets-Inventory)/Total Current Liabilities
=(8306-1277)/3747
=1.88

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


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.


Related Terms

Total Current Assets, Total Current Liabilities, Inventory, Current Ratio


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Western Digital Corp Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
quick ratio 1.211.251.491.571.451.872.062.261.471.61

Western Digital Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
quick ratio 3.181.361.471.591.801.901.611.591.511.88
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