Archer-Daniels-Midland Company (ADM)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,368,000 | 1,037,000 | 943,000 | 666,000 | 852,000 |
| Short-term investments | US$ in thousands | 7,228,000 | 109,000 | 46,000 | 61,000 | 3,000 |
| Total current liabilities | US$ in thousands | 18,662,000 | 24,191,000 | 21,948,000 | 18,182,000 | 13,734,000 |
| Cash ratio | 0.46 | 0.05 | 0.05 | 0.04 | 0.06 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,368,000K
+ $7,228,000K)
÷ $18,662,000K
= 0.46
The cash ratio of Archer-Daniels-Midland Company has shown fluctuations over the past five years. The ratio has improved significantly from 0.06 in 2019 to 0.46 in 2023, indicating a healthier liquidity position in the most recent year. This suggests that the company has increased its ability to cover its short-term obligations solely with its available cash and cash equivalents.
The sharp increase in the cash ratio from 2022 to 2023 highlights a substantial improvement in the company's liquidity position, signaling better cash management or a reduction in short-term liabilities during the period. However, the relatively low cash ratios in 2020 and 2021 may have indicated challenges in maintaining adequate cash reserves relative to current liabilities during those years.
Overall, the increase in the cash ratio to 0.46 in 2023 reflects a positive trend towards improved liquidity and better ability to meet short-term financial obligations, which can enhance the company's financial stability and flexibility in managing operational needs and unexpected demands.
Peer comparison
Dec 31, 2023