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Xtera Communications (OTCPK:XCOMQ) 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.
Xtera Communications Quick Ratio Related Terms
Xtera Communications Quick Ratio Historical Data
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The historical data trend for Xtera Communications'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.
For the Communication Equipment subindustry, Xtera Communications'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.
Xtera Communications Quick Ratio vs Hardware Industry
For the Hardware industry and Technology sector, Xtera Communications's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Xtera Communications'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.
Xtera Communications's Quick Ratio for the fiscal year that ended in Sep. 2015 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.
Xtera Communications (XCOMQ) has a Quick Ratio of 0.40 as of Jun. 2016. Quick ratio is the ratio of current assets less inventory to current liabilities. View historical data on Xtera Communications and its competitors.
Is Xtera Communications' Quick Ratio too high?
Xtera Communications' current Quick Ratio is 0.40. The Hardware industry median Quick Ratio is 1.39. Xtera Communications' value of 0.40 is 71.2% below this industry median.
How does Xtera Communications' Quick Ratio compare to TAIT and AEY?
Xtera Communications' Quick Ratio of 0.40 can be compared against companies in the Hardware industry. The industry median Quick Ratio is 1.39. Xtera Communications' value of 0.40 is 71.2% 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 a Hardware company?
The median Quick Ratio among Hardware companies is 1.39, based on 2,495 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. Xtera Communications's current Quick Ratio of 0.40 is 71.2% 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 Xtera Communications and its competitors. For the Hardware industry, the median Quick Ratio is 1.39 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Xtera Communications's current Quick Ratio is 0.40. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Xtera Communications stock overvalued right now?
Xtera Communications (XCOMQ) has a current Quick Ratio of 0.40. The current Quick Ratio is 0.40 and 71.2% below the Hardware industry median of 1.39. 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 Xtera Communications (XCOMQ), the current Quick Ratio is 0.40 as of Jun. 2016. 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.
Xtera Communications Inc is a provider of optical transport solutions. It sells its optical transport solutions to telecommunications service providers, content service providers, enterprises and government entities across the world to support their deployments of long-haul terrestrial and submarine optical cable networks. Its optical networking solutions are designed to offer reach and capacity for intermediate sites between end-points of long-haul networks. Its primary service offerings include services, installation and deployment services, on-site hardware replacement services, system maintenance services, extended hardware warranty services and training across a spectrum of products within the optical networking industry. The company offers hardware, software and turnkey solutions.
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