American Eagle Outfitters Inc (AEO)

Cash ratio

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Cash and cash equivalents	US$ in thousands	354,094	170,209	434,770	850,477	361,930
Short-term investments	US$ in thousands	100,000	85,249	296,012	325,507	55,000
Total current liabilities	US$ in thousands	891,172	768,948	842,871	858,482	751,756
Cash ratio		0.51	0.33	0.87	1.37	0.55

February 3, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($354,094K + $100,000K) ÷ $891,172K
= 0.51

The cash ratio of American Eagle Outfitters Inc has fluctuated over the past five years. As of February 3, 2024, the cash ratio stands at 0.51, indicating that the company has $0.51 in cash and cash equivalents for every $1 of current liabilities. This current ratio is higher than the previous year's ratio of 0.33, which suggests an improvement in the company's ability to cover its short-term obligations with cash on hand.

However, when compared to the cash ratio of 0.87 in January 29, 2022, and 1.37 in January 30, 2021, the current cash ratio appears relatively low. This decline in the cash ratio over the past two years may raise concerns about the company's liquidity position and its ability to meet its short-term financial obligations without relying on external sources of funding.

It is worth noting that the cash ratio of 0.55 in February 1, 2020, was higher than the most recent ratio, indicating a potential trend of decreasing liquidity over the past few years. Investors and stakeholders may want to closely monitor American Eagle Outfitters Inc's cash position and liquidity management strategies to assess its ability to weather potential financial challenges in the future.