Quick Ratio

The quick ratio measures a company’s ability to cover its short-term liabilities using only its most liquid assets, like cash and receivables, excluding inventory.

A current ratio of 1.42x means SHOP has $1.42 in liquid assets for every $1 of short-term debt, indicating a comfortable liquidity position. This exceeds the sector median of 0.72x and places SHOP in the 83rd percentile among its peers, meaning it holds more liquidity than most. The year-over-year change is not available, but quarter-over-quarter the ratio fell 76.5% from 6.05x to 1.42x, marking a steep decline. Although the current level is still above the sector median, the sharp drop suggests that recent events (e.g., increased debt or reduced liquid assets) have eroded SHOP’s liquidity cushion. This combination of a strong absolute level but a negative trend introduces moderate risk, as the company may face tighter short-term financial flexibility going forward. The metric partially supports the NEUTRAL verdict: the healthy ratio relative to peers is a positive, but the dramatic contraction warrants caution, keeping the overall stance balanced.

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