Quick Ratio

The quick ratio measures a company’s ability to cover its short-term debts using its most liquid assets (cash, marketable securities, and receivables, excluding inventory).

At 0.18x, CarMax has only $0.18 of liquid assets for every $1 of current liabilities, which is well below the consumer cyclical sector median of 0.70x and places the company in the 12th percentile among its peers. Year-over-year data is not available, but the ratio improved 28.6% quarter-over-quarter, rising from 0.14x to 0.18x. A very low ratio combined with a recent uptick suggests that while liquidity pressures remain acute, the quarter-over-quarter improvement offers a modest offset. This combination points to elevated short-term financial risk for investors, as the company could struggle to meet immediate obligations without generating cash or borrowing. The overall verdict on the stock is CAUTIOUS, and this metric—showing a dangerously low liquidity level even after the QoQ gain—directly supports that cautious stance.

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