ABM Industries Incorporated (ABM)
Cash ratio
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 64,600 | 69,500 | 73,000 | 62,800 | 394,200 |
| Short-term investments | US$ in thousands | 0 | — | 14,500 | 11,800 | 11,000 |
| Total current liabilities | US$ in thousands | 1,348,400 | 1,217,900 | 1,353,200 | 1,285,800 | 986,900 |
| Cash ratio | 0.05 | 0.06 | 0.06 | 0.06 | 0.41 |
October 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($64,600K
+ $0K)
÷ $1,348,400K
= 0.05
The cash ratio of ABM Industries Incorporated has been relatively stable over the past five years, ranging from 0.05 to 0.41. The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents.
As of October 31, 2024, the cash ratio stands at 0.05, indicating that for every dollar of current liabilities, ABM Industries has $0.05 in cash or near-cash assets available to cover those liabilities.
A decreasing trend in the cash ratio over the years may suggest that the company is becoming less able to cover its short-term obligations with cash on hand. In contrast, a sudden spike in the cash ratio in 2020 to 0.41 may indicate a significant increase in cash reserves relative to short-term liabilities, potentially resulting from specific events like increased cash holdings or decreased current liabilities.
However, it is essential to consider the industry norms and the company's specific circumstances when interpreting the cash ratio. A low cash ratio could signal liquidity issues, while an excessively high ratio may suggest an inefficient use of resources. Monitoring changes in the cash ratio over time provides insights into the company's liquidity position and financial health.
Peer comparison
Oct 31, 2024