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. TransDigm Group's quick ratio for the quarter that ended in Sep. 2024 was 1.29.
TransDigm Group has a quick ratio of 1.29. It generally indicates good short-term financial strength.
The historical rank and industry rank for TransDigm Group's Quick Ratio or its related term are showing as below:
TDG'
s Quick Ratio Range Over the Past 10 Years
Min: 1.29 Med: 2.98 Max: 3.51
Current: 1.29
During the past 13 years, TransDigm Group's highest Quick Ratio was 3.51. The lowest was 1.29. And the median was 2.98.
TDG's Quick Ratio is ranked better than 54.75% of 316
companies
in the Aerospace & Defense industry
Industry Median: 1.195
vs TDG: 1.29
TransDigm Group Quick Ratio Historical Data
The historical data trend for TransDigm Group'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 TransDigm Group's Quick Ratio
For the Aerospace & Defense subindustry, TransDigm Group'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.
TransDigm Group's Quick Ratio Distribution in the Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, TransDigm Group's Quick Ratio distribution charts can be found below:
* The bar in red indicates where TransDigm Group's Quick Ratio falls into.
TransDigm Group 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.
TransDigm Group's Quick Ratio for the fiscal year that ended in Sep. 2024 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.
TransDigm Group (NYSE:TDG) 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.
TransDigm Group Quick Ratio Related Terms
Thank you for viewing the detailed overview of TransDigm Group's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
TransDigm manufactures and services a diverse set of specialized parts for commercial and military aircraft. The firm organizes itself in three segments: power and control, airframes, and a small non-aviation segment, which serves mostly off-road vehicles and mining equipment. It operates as an acquisitive holding company that focuses its portfolio on firms that make proprietary aerospace products with substantial aftermarket demand. TransDigm regularly employs financial leverage to amplify its operating results.
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