Autoliv Inc (ALV)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 330,000 | 498,000 | 594,000 | 969,000 | 1,178,200 |
| Short-term investments | US$ in thousands | — | -97,000 | -1,000 | -470,000 | — |
| Total current liabilities | US$ in thousands | 3,633,000 | 4,035,000 | 3,642,000 | 2,821,000 | 3,146,900 |
| Cash ratio | 0.09 | 0.10 | 0.16 | 0.18 | 0.37 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($330,000K
+ $—K)
÷ $3,633,000K
= 0.09
The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a better liquidity position and ability to meet its short-term obligations.
Analyzing Autoliv Inc's cash ratio over the years, we see a declining trend. In December 2020, the cash ratio was 0.37, indicating that the company had $0.37 in cash and cash equivalents for every $1 of its short-term liabilities. However, by December 2024, the cash ratio had decreased to 0.09, reflecting a reduction in liquidity.
This declining trend in the cash ratio could raise concerns about Autoliv Inc's ability to meet its short-term obligations solely from its cash reserves. It suggests that the company may be relying more on other sources of funding to cover its liabilities. Investors and creditors may view a decreasing cash ratio as a signal of potential liquidity challenges that could impact the company's financial health and operational flexibility in the future. Autoliv Inc may need to closely monitor and manage its cash position to ensure it maintains adequate liquidity to support its short-term financial obligations.
Peer comparison
Dec 31, 2024