Ametek Inc (AME)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	373,999	409,804	345,386	346,772	1,212,820
Short-term investments	US$ in thousands	—	452,981	—	—	292,625
Total current liabilities	US$ in thousands	2,098,590	2,882,570	1,564,200	1,563,310	1,075,920
Cash ratio		0.18	0.30	0.22	0.22	1.40

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($373,999K + $—K) ÷ $2,098,590K
= 0.18

Based on the data provided, the cash ratio of Ametek Inc has fluctuated over the past five years.

The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio is generally considered better as it indicates that the company has more liquid assets available to meet its obligations.

In December 31, 2020, Ametek Inc had a healthy cash ratio of 1.40, indicating that the company had more than enough cash to cover its short-term liabilities. However, there was a significant decrease in the cash ratio in the following years, with the ratio dropping to 0.22 by December 31, 2021, where it remained constant till December 31, 2022. This abrupt decrease may suggest that the company's cash position weakened or its short-term liabilities increased during this period.

There was a slight improvement in the cash ratio by December 31, 2023, reaching 0.30. This improvement could indicate that the company made efforts to strengthen its cash position relative to its short-term liabilities. However, the ratio fell again to 0.18 by December 31, 2024, implying that the company might be facing challenges in managing its liquidity effectively.

Overall, the downward trend in the cash ratio of Ametek Inc raises concerns about its liquidity position and ability to cover its short-term obligations. It may be important for the company to monitor its cash management practices and work towards improving its liquidity position to ensure financial stability in the future.