The AES Corporation (AES)
Cash ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,426,000 | 1,765,000 | 1,322,000 | 1,441,000 | 1,374,000 | 1,553,000 | 1,075,000 | 1,056,000 | 943,000 | 1,411,000 | 1,213,000 | 1,886,000 | 1,089,000 | 1,505,000 | 1,417,000 | 1,544,000 | 1,029,000 | 1,145,000 | 1,169,000 | 1,426,000 |
| Short-term investments | US$ in thousands | 395,000 | 538,000 | 713,000 | 822,000 | 730,000 | 671,000 | 595,000 | 440,000 | 232,000 | 170,000 | 282,000 | 187,000 | 335,000 | 384,000 | 422,000 | 328,000 | 400,000 | 334,000 | 410,000 | 378,000 |
| Total current liabilities | US$ in thousands | 9,731,000 | 8,819,000 | 7,628,000 | 6,776,000 | 6,491,000 | 5,902,000 | 5,989,000 | 5,753,000 | 4,732,000 | 4,658,000 | 4,337,000 | 5,021,000 | 5,362,000 | 5,777,000 | 5,448,000 | 5,432,000 | 5,096,000 | 4,991,000 | 4,042,000 | 4,357,000 |
| Cash ratio | 0.19 | 0.26 | 0.27 | 0.33 | 0.32 | 0.38 | 0.28 | 0.26 | 0.25 | 0.34 | 0.34 | 0.41 | 0.27 | 0.33 | 0.34 | 0.34 | 0.28 | 0.30 | 0.39 | 0.41 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,426,000K
+ $395,000K)
÷ $9,731,000K
= 0.19
The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents.
For AES Corp., the cash ratio has been fluctuating over the past eight quarters. It decreased from 0.62 in Q3 2022 to 0.47 in Q1 2022, before gradually increasing to 0.58 in Q4 2022. In the most recent quarter, Q4 2023, the cash ratio stands at 0.35.
A cash ratio of 0.35 suggests that AES Corp. may have difficulty covering its short-term obligations solely with its cash and cash equivalents. This may indicate a potential liquidity risk, especially if the trend continues downward in future quarters. It is important for the company to closely monitor its cash position and ensure that it maintains sufficient liquidity to meet its short-term obligations.
Overall, the declining trend in the cash ratio for AES Corp. warrants further investigation to assess the company's liquidity position and financial health.