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. Carvana Co's quick ratio for the quarter that ended in Dec. 2023 was 1.41.
Carvana Co has a quick ratio of 1.41. It generally indicates good short-term financial strength.
The historical rank and industry rank for Carvana Co's Quick Ratio or its related term are showing as below:
CVNA'
s Quick Ratio Range Over the Past 10 Years
Min: 0.46 Med: 0.76 Max: 1.9
Current: 1.41
During the past 10 years, Carvana Co's highest Quick Ratio was 1.90. The lowest was 0.46. And the median was 0.76.
CVNA's Quick Ratio is ranked better than 66.95% of 1307
companies
in the Vehicles & Parts industry
Industry Median: 1.05
vs CVNA: 1.41
Carvana Co Quick Ratio Historical Data
The historical data trend for Carvana Co'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 Carvana Co's Quick Ratio
For the Auto & Truck Dealerships subindustry, Carvana Co'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.
Carvana Co's Quick Ratio Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Carvana Co's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Carvana Co's Quick Ratio falls into.
Carvana Co 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.
Carvana Co'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.
Carvana Co (NYSE:CVNA) 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.
Carvana Co Quick Ratio Related Terms
Thank you for viewing the detailed overview of Carvana Co's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Carvana Co is an e-commerce platform for buying and selling used cars. The company derives revenue from used vehicle sales, wholesale vehicle sales and other sales and revenues. The other sales and revenues include sales of loans originated and sold in securitization transactions or to financing partners, commissions received on VSCs and sales of GAP waiver coverage. The foundation of the business is retail vehicle unit sales. This drives the majority of the revenue and allows the company to capture additional revenue streams associated with financing, VSCs, auto insurance and GAP waiver coverage, as well as trade-in vehicles.
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