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Grom Social Enterprises (OTCPK:GROM) 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.
Grom Social Enterprises Quick Ratio Related Terms
Grom Social 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 Internet Content & Information subindustry, Grom Social 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.
Grom Social Enterprises Quick Ratio vs Interactive Media Industry
For the Interactive Media industry and Communication Services sector, Grom Social Enterprises's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Grom Social Enterprises's Quick Ratio falls into.
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.
Grom Social Enterprises's Quick Ratio for the fiscal year that ended in Dec. 2023 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.
Grom Social Enterprises (GROM) has a Quick Ratio of 0.59 as of Mar. 2024. Quick ratio is the ratio of current assets less inventory to current liabilities. View historical data on Grom Social Enterprises and its competitors.
Is Grom Social Enterprises' Quick Ratio too high?
Grom Social Enterprises' current Quick Ratio is 0.59. The Interactive Media industry median Quick Ratio is 2.02. Grom Social Enterprises' value of 0.59 is 70.8% below this industry median. Overall, Grom Social Enterprises has a GF Score™ of 12/100, reflecting its overall financial health beyond just this single metric.
How does Grom Social Enterprises' Quick Ratio compare to FMHS and HMLA?
Grom Social Enterprises' Quick Ratio of 0.59 can be compared against companies in the Interactive Media industry. The industry median Quick Ratio is 2.02. Grom Social Enterprises' value of 0.59 is 70.8% below this benchmark. 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 an Interactive Media company?
The median Quick Ratio among Interactive Media companies is 2.02, based on 565 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. Grom Social Enterprises's current Quick Ratio of 0.59 is 70.8% 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 Grom Social Enterprises and its competitors. For the Interactive Media industry, the median Quick Ratio is 2.02 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Grom Social Enterprises's current Quick Ratio is 0.59. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Grom Social Enterprises stock overvalued right now?
Grom Social Enterprises (GROM) has a current Quick Ratio of 0.59. The current Quick Ratio is 0.59 and 70.8% below the Interactive Media industry median of 2.02. Grom Social Enterprises' overall GF Score™ is 12/100. 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 Grom Social Enterprises (GROM), the current Quick Ratio is 0.59 as of Mar. 2024. 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.
Grom Social Enterprises Inc is a social media, technology, and entertainment company for kids focused on producing original content. In addition to providing a social media platform, the company creates content consisting of animated characters, interactive charts, videos, blogs, and games. It has three reportable business segments: Animation, which includes TDH; Original Content, which includes CIM; and Social & Technology, which includes GSOC and GEDU. The majority of its revenue is from the Animation segment.
12GF Score
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