Adient PLC (ADNT)
Cash ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,110,000 | 947,000 | 1,521,000 | 1,692,000 | 924,000 |
| Short-term investments | US$ in thousands | — | — | 335,000 | — | 12,000 |
| Total current liabilities | US$ in thousands | 3,738,000 | 3,501,000 | 3,511,000 | 3,819,000 | 3,835,000 |
| Cash ratio | 0.30 | 0.27 | 0.53 | 0.44 | 0.24 |
September 30, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,110,000K
+ $—K)
÷ $3,738,000K
= 0.30
The cash ratio is a measure of a company's ability to cover its short-term liabilities with its readily available cash and cash equivalents. Adient plc's cash ratio has varied over the past five years, indicating fluctuations in its liquidity position.
In 2023, the cash ratio stood at 0.43, showing that for every dollar of current liabilities, the company had $0.43 in cash and cash equivalents. This represents a slight improvement from the previous year's ratio of 0.39. However, it is notably lower than the ratio reported in 2021, which was 0.75.
The significant drop in the cash ratio in 2022 relative to 2021 suggests a potential decrease in the company's ability to meet its short-term obligations with available cash. However, the subsequent improvement in 2023 indicates a partial recovery in liquidity.
The comparison of the cash ratio over the five-year period suggests that Adient plc experienced liquidity challenges in certain years but managed to enhance its cash position in 2023 compared to 2019 and 2020.
It is important for stakeholders to monitor the trend in the cash ratio as it provides insights into the company's short-term solvency and ability to manage its current obligations.
Peer comparison
Sep 30, 2023