Advance Auto Parts Inc (AAP)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,869,420 | 503,471 | 270,805 | 601,428 | 834,992 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 4,665,360 | 5,307,400 | 5,420,850 | 5,180,310 | 4,743,920 |
| Cash ratio | 0.40 | 0.09 | 0.05 | 0.12 | 0.18 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,869,420K
+ $—K)
÷ $4,665,360K
= 0.40
The cash ratio of Advance Auto Parts Inc has shown fluctuations over the past five years. As of December 31, 2020, the company had a cash ratio of 0.18, indicating that it had $0.18 in cash and cash equivalents for every $1 of current liabilities. However, this ratio decreased to 0.12 by the end of 2021, suggesting a decline in the company's ability to cover its short-term obligations with its available cash.
Subsequently, by December 31, 2022, the cash ratio fell further to 0.05, signaling a significant reduction in the company's liquidity position. This could raise concerns about its ability to meet its immediate financial obligations using its existing cash resources.
However, there was some improvement in the cash ratio by the end of 2023, with the ratio increasing to 0.09. While this uptick indicates a slight improvement in liquidity, the ratio remains relatively low compared to earlier years.
Notably, as of December 31, 2024, Advance Auto Parts Inc experienced a substantial improvement in its cash ratio, reaching 0.40. This significant increase suggests a strengthened liquidity position, indicating the company had $0.40 in cash and cash equivalents for every dollar of current liabilities, which may reflect more robust financial health and enhanced ability to meet short-term obligations.
Peer comparison
Dec 31, 2024