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Zale Corp (NYSE:ZLC)
Quick Ratio
0.15 (As of Jan. 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. Zale Corp's quick ratio for the quarter that ended in Jan. 2014 was 0.15.

Zale Corp has a quick ratio of 0.15. It indicates that the company cannot currently fully pay back its current liabilities.

ZLC' s 10-Year Quick Ratio Range
Min: 0.13   Max: 3.41
Current: 0.15

0.13
3.41

During the past 13 years, Zale Corp's highest Quick Ratio was 3.41. The lowest was 0.13. And the median was 0.35.

ZLC's Quick Ratiois ranked lower than
59% of the 1152 Companies
in the Global Luxury Goods industry.

( Industry Median: 0.85 vs. ZLC: 0.15 )

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.

Zale Corp's Quick Ratio for the fiscal year that ended in Jul. 2013 is calculated as

Quick Ratio (A: Jul. 2013 )=(Total Current Assets-Inventory)/Total Current Liabilities
=(837.22-767.54)/409.684
=0.17

Zale Corp's Quick Ratio for the quarter that ended in Jan. 2014 is calculated as

Quick Ratio (Q: Jan. 2014 )=(Total Current Assets-Inventory)/Total Current Liabilities
=(935.786-864.275)/466.053
=0.15

* 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.

Zale Corp Annual Data

Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13
quick ratio 0.340.310.360.400.580.220.180.210.180.17

Zale Corp Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
quick ratio 0.170.150.190.180.130.150.160.170.140.15
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