Quick Ratio

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

LULU’s current quick ratio of 0.94x sits above the sector median of 0.72x and places the company in the 66th percentile among sector peers. Year-over-year change is not available, but quarter-over-quarter the metric jumped by +38.2% from 0.68x to 0.94x. Although the quick ratio is below the 1.0x threshold (meaning liquid assets do not fully cover current liabilities), the strong quarterly improvement and above-median position suggest decreasing short-term liquidity risk. This combination of a level above the peer median and a rising trend points to a lower risk of liquidity distress, yet the ratio still implies some reliance on inventory or other current assets to meet obligations. The metric supports the overall NEUTRAL verdict because the quick ratio is improving and better than the sector norm, but remains below 1.0x, leaving no strong bullish or bearish signal.

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