Allegiant Travel Company (ALGT)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	143,259	229,989	363,378	152,764	121,888
Short-term investments	US$ in thousands	671,414	725,063	819,478	532,477	335,928
Total current liabilities	US$ in thousands	1,212,310	869,831	663,045	689,345	612,584
Cash ratio		0.67	1.10	1.78	0.99	0.75

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($143,259K + $671,414K) ÷ $1,212,310K
= 0.67

The cash ratio of Allegiant Travel has fluctuated over the past five years. In 2023, the cash ratio decreased to 0.72 from 1.28 in 2022, indicating a significant decrease in liquidity as the company may have less cash available to cover its short-term liabilities. This downward trend is a cause for concern as it suggests a potential risk in meeting immediate financial obligations.

Comparing 2023 to 2021, the cash ratio declined from 1.83 to 0.72, indicating a substantial reduction in liquidity over this period. This decline may indicate a decrease in the company's ability to cover its current liabilities with cash and cash equivalents.

In 2023, the cash ratio fell below the levels observed in 2020 and 2019, which were 1.03 and 0.81, respectively. This suggests that Allegiant Travel had less cash on hand relative to its current liabilities in 2023 compared to the two prior years. The decreasing trend in the cash ratio over the past five years raises concerns about the company's liquidity position and its ability to meet short-term financial obligations.

Overall, the decreasing trend in Allegiant Travel's cash ratio highlights the importance of monitoring the company's liquidity position closely to ensure it can meet its short-term financial commitments effectively.