Smith AO Corporation (AOS)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 339,900 | 391,200 | 443,300 | 573,100 | 374,000 |
| Short-term investments | US$ in thousands | 23,500 | 90,600 | 188,100 | 116,500 | 177,400 |
| Total current liabilities | US$ in thousands | 945,300 | 934,200 | 1,118,800 | 886,300 | 766,500 |
| Cash ratio | 0.38 | 0.52 | 0.56 | 0.78 | 0.72 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($339,900K
+ $23,500K)
÷ $945,300K
= 0.38
The cash ratio of A.O. Smith Corp. has shown a declining trend over the past five years. The ratio decreased from 0.79 in 2019 to 0.43 in 2023. This indicates that the company's ability to cover its short-term liabilities with its available cash and cash equivalents has weakened over the period. A decreasing cash ratio could potentially suggest liquidity challenges or inefficiencies in managing cash resources. It is important for the company to closely monitor its cash position and liquidity management practices to ensure it can meet its short-term obligations effectively.
Peer comparison
Dec 31, 2023