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Magic Software Enterprises (FRA:MGK) 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.
Magic Software Enterprises Quick Ratio Related Terms
Magic Software Enterprises Quick Ratio Historical Data
* 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 Information Technology Services subindustry, Magic Software Enterprises'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.
Magic Software Enterprises Quick Ratio vs Software Industry
For the Software industry and Technology sector, Magic Software Enterprises's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Magic Software Enterprises's Quick Ratio falls into.
Magic Software Enterprises 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.
* 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.
Magic Software Enterprises (FRA:MGK) has a Quick Ratio of 1.48 as of Sep. 2025. Quick ratio is the ratio of current assets less inventory to current liabilities. View historical data on Magic Software Enterprises and its competitors. This is 41% below median its historical median of 2.50. Over the past decade, Magic Software Enterprises' Quick Ratio has ranged from 1.48 to 4.77.
Is Magic Software Enterprises' Quick Ratio too high?
Magic Software Enterprises' current Quick Ratio of 1.48 is 41% below median its 10-year median of 2.50. Over the past 10 years, this metric has ranged from a low of 1.48 to a high of 4.77. The Software industry median Quick Ratio is 1.68. Magic Software Enterprises' value of 1.48 is 11.9% below this industry median. Overall, Magic Software Enterprises has a GF Score™ of 90/100, reflecting its overall financial health beyond just this single metric.
How does Magic Software Enterprises' Quick Ratio compare to IBM and ACN?
Magic Software Enterprises' Quick Ratio of 1.48 can be compared against companies in the Software industry. The industry median Quick Ratio is 1.68. Magic Software Enterprises' value of 1.48 is 11.9% below this benchmark. Historically, Magic Software Enterprises' own Quick Ratio has ranged from 1.48 to 4.77 over the past decade. While the company's 10-year median is 2.50 vs. the industry median of 1.68, Magic Software Enterprises has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Quick Ratio for a Software company?
The median Quick Ratio among Software companies is 1.68, based on 2,875 companies in the industry. Companies in the top quartile (top 25%) have a Quick Ratio significantly above this median, while those in the bottom quartile fall well below. However, Quick Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Magic Software Enterprises's current Quick Ratio of 1.48 is 11.9% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Quick Ratio mean?
A high Quick Ratio can signal that a stock is expensive relative to its fundamentals. Quick ratio is the ratio of current assets less inventory to current liabilities. View historical data on Magic Software Enterprises and its competitors. For the Software industry, the median Quick Ratio is 1.68 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Magic Software Enterprises's current Quick Ratio is 1.48, which is 41% below median its own 10-year median of 2.50. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Magic Software Enterprises stock overvalued right now?
Magic Software Enterprises (FRA:MGK) has a current Quick Ratio of 1.48. The stock's GF Value™ is €12.26, compared to a current price of €16.10 — trading 31.3% above its estimated fair value. The current Quick Ratio is 1.48, which is 41% below median its 10-year median of 2.50 and 11.9% below the Software industry median of 1.68. Magic Software Enterprises' overall GF Score™ is 90/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Quick Ratio calculated?
Quick Ratio is calculated from a company's financial statements. For Magic Software Enterprises (FRA:MGK), the current Quick Ratio is 1.48 as of Sep. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Magic Software Enterprises (FRA:MGK) Overvalued in 2026?
Based on GuruFocus' analysis, Magic Software Enterprises stock appears to be overvalued.
The current stock price of €16.10 is trading 31.3% above its estimated GF Value™ of €12.26.
Key valuation signals for FRA:MGK:
Quick Ratio: 1.48 (41% below median its 10-year median of 2.50)
GF Value™: €12.26 vs. price of €16.10 (31.3% above fair value)
Industry Position: 11.9% below the Software median
No single metric tells the full story. See the FRA:MGK stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Magic Software Enterprises Ltd is a software development company. The company's operating segment includes Software Services and IT Professional Services. The company generates maximum revenue from the IT Professional Services segment. IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, as well as supplemental outsourcing services. Geographically, it derives a majority of revenue from the United States and also has a presence in Israel, Europe, Japan, and Other countries.
90GF Score
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