AGCO Corporation (AGCO)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 612,700 | 595,500 | 789,500 | 889,100 | 1,119,100 |
| Short-term investments | US$ in thousands | 700 | — | — | — | 442,000 |
| Total current liabilities | US$ in thousands | 3,826,000 | 4,343,600 | 4,088,000 | 3,454,600 | 3,362,800 |
| Cash ratio | 0.16 | 0.14 | 0.19 | 0.26 | 0.46 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($612,700K
+ $700K)
÷ $3,826,000K
= 0.16
AGCO Corporation's cash ratio has shown a declining trend over the five-year period from December 31, 2020 to December 31, 2024. The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, decreased from 0.46 in 2020 to 0.16 in 2024.
The decreasing trend in the cash ratio indicates that AGCO Corporation may be facing challenges in maintaining an optimal level of cash reserves relative to its short-term obligations. A lower cash ratio could potentially signal liquidity issues or inefficiencies in managing its working capital.
It is essential for AGCO Corporation to closely monitor and manage its cash position to ensure it can meet its short-term financial obligations and sustain its operations without relying heavily on external financing. The company may need to assess its cash management practices, optimize its working capital, and consider strategies to improve its liquidity position in order to enhance its financial stability and resilience.
Peer comparison
Dec 31, 2024