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. Packaging of America's quick ratio for the quarter that ended in Dec. 2023 was 1.77.
Packaging of America has a quick ratio of 1.77. It generally indicates good short-term financial strength.
The historical rank and industry rank for Packaging of America's Quick Ratio or its related term are showing as below:
PKG'
s Quick Ratio Range Over the Past 10 Years
Min: 1.37 Med: 1.76 Max: 2.51
Current: 1.77
During the past 13 years, Packaging of America's highest Quick Ratio was 2.51. The lowest was 1.37. And the median was 1.76.
PKG's Quick Ratio is ranked better than 68.46% of 390
companies
in the Packaging & Containers industry
Industry Median: 1.205
vs PKG: 1.77
Packaging of America Quick Ratio Historical Data
The historical data trend for Packaging of America'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 Packaging & Containers subindustry, Packaging of America'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.
Packaging of America Quick Ratio Distribution
For the Packaging & Containers industry and Consumer Cyclical sector, Packaging of America's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Packaging of America's Quick Ratio falls into.
Packaging of America 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.
Packaging of America'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.
Packaging of America (NYSE:PKG) 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.
Packaging of America Quick Ratio Related Terms
Thank you for viewing the detailed overview of Packaging of America's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Packaging of America (Packaging of America) Business Description
Packaging Corp of America is the third-largest containerboard and corrugated packaging manufacturer in the United States. It produces over 4 million tons of containerboard annually. The company's share of the domestic containerboard market is roughly 10%. The firm differentiates itself from larger competitors by focusing on smaller customers and operating with a high degree of flexibility.
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