The AES Corporation (AES)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,524,000 | 1,426,000 | 1,374,000 | 943,000 | 1,089,000 |
| Short-term investments | US$ in thousands | 79,000 | 395,000 | 730,000 | 232,000 | 335,000 |
| Total current liabilities | US$ in thousands | 8,571,000 | 9,731,000 | 6,491,000 | 4,732,000 | 5,362,000 |
| Cash ratio | 0.19 | 0.19 | 0.32 | 0.25 | 0.27 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,524,000K
+ $79,000K)
÷ $8,571,000K
= 0.19
The cash ratio of The AES Corporation, as depicted in the provided data, shows a fluctuating trend over the five-year period from 2020 to 2024. The cash ratio measures the company's ability to cover its short-term liabilities using its cash and cash equivalents.
As per the data, the cash ratio was 0.27 in 2020, indicating that for every dollar of current liabilities, the company had $0.27 in cash and cash equivalents. The ratio slightly decreased to 0.25 in 2021, suggesting a lower level of liquidity compared to the previous year.
In 2022, the cash ratio saw an improvement, reaching 0.32, which indicates a healthier liquidity position for the company. However, in the subsequent years 2023 and 2024, the cash ratio declined significantly to 0.19, reflecting a decrease in the company's ability to cover its short-term obligations with its available cash resources.
Overall, the fluctuating cash ratio of The AES Corporation highlights the importance of monitoring liquidity levels to ensure the company's ability to meet its short-term financial obligations effectively. This analysis underscores the need for maintaining an optimal cash position to support the company's financial stability and operational flexibility.