AAR Corp (AIR)
Cash ratio
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 85,800 | 69,200 | 65,100 | 70,300 | 68,400 | 52,700 | 49,000 | 44,300 | 53,500 | 40,600 | 42,700 | 48,800 | 51,800 | 99,200 | 110,000 | 107,700 | 404,700 | 37,000 | 38,200 | 39,900 |
| Short-term investments | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 466,900 | 428,200 | 380,100 | 393,500 | 351,500 | 331,600 | 323,700 | 357,900 | 348,200 | 343,100 | 320,200 | 324,200 | 336,800 | 387,700 | 408,200 | 394,300 | 383,100 | 485,300 | 406,500 | 396,400 |
| Cash ratio | 0.18 | 0.16 | 0.17 | 0.18 | 0.19 | 0.16 | 0.15 | 0.12 | 0.15 | 0.12 | 0.13 | 0.15 | 0.15 | 0.26 | 0.27 | 0.27 | 1.06 | 0.08 | 0.09 | 0.10 |
May 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($85,800K
+ $—K)
÷ $466,900K
= 0.18
The cash ratio of AAR Corp has fluctuated over the past few years, with values ranging from 0.08 to 1.06. The cash ratio measures the 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.
Looking at the trend in AAR Corp's cash ratio, we can observe some variability. The ratio was relatively stable around 0.15 to 0.20 from November 2020 to August 2023, indicating a moderate ability to meet short-term obligations with available cash. However, there was a significant spike in the cash ratio to 1.06 in August 2020, suggesting a substantial increase in cash reserves relative to short-term liabilities at that time.
It's essential to note that a very high cash ratio, such as the one observed in August 2020, may indicate inefficiency in deploying cash resources into more productive investments. On the other hand, a very low cash ratio, as seen in November 2019, could signal liquidity issues and the need to manage cash more effectively.
Overall, AAR Corp's cash ratio fluctuates, and it is crucial for the company to strike a balance between maintaining an adequate level of cash reserves for emergencies and investing excess cash to generate returns for shareholders.
Peer comparison
May 31, 2024