American Eagle Outfitters Inc (AEO)

Cash ratio

		Jan 31, 2025	Feb 3, 2024	Jan 31, 2024	Jan 31, 2023	Jan 28, 2023
Cash and cash equivalents	US$ in thousands	308,962	354,094	354,094	170,209	170,209
Short-term investments	US$ in thousands	50,000	100,000	100,000	85,249	85,249
Total current liabilities	US$ in thousands	882,656	891,172	891,172	768,948	768,948
Cash ratio		0.41	0.51	0.51	0.33	0.33

January 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($308,962K + $50,000K) ÷ $882,656K
= 0.41

The cash ratio of American Eagle Outfitters Inc has shown some fluctuations over the years. From January 28, 2023, to January 31, 2023, and then to February 3, 2024, the cash ratio remained stable at 0.33. However, there was a notable increase to 0.51 on January 31, 2024 and this level was maintained until January 31, 2025 when it decreased slightly to 0.41.

The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to cover short-term obligations. American Eagle Outfitters Inc's cash ratio of 0.41 as of January 31, 2025, shows that the company has a sufficient level of cash and cash equivalents to meet approximately 41% of its short-term liabilities.

It is important to monitor the cash ratio over time to assess the company's liquidity position and its ability to meet its short-term financial obligations. An increasing trend in the cash ratio may indicate improved liquidity, while a decreasing trend may raise concerns about the company's ability to cover its short-term liabilities with its available cash resources.