Smith AO Corporation (AOS)
Cash ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 239,600 | 219,300 | 216,100 | 251,600 | 339,900 | 281,000 | 378,900 | 406,200 | 391,200 | 358,800 | 359,400 | 405,800 | 443,300 | 486,100 | 444,800 | 578,500 | 573,100 | 377,900 | 442,700 | 416,100 |
| Short-term investments | US$ in thousands | 36,500 | 36,300 | 17,200 | 51,500 | 23,500 | 60,800 | 30,800 | 89,800 | 90,600 | 58,300 | 100,000 | 173,600 | 188,100 | 199,100 | 137,100 | 87,000 | 116,500 | 131,100 | 126,000 | 135,600 |
| Total current liabilities | US$ in thousands | 897,200 | 844,200 | 872,400 | 883,400 | 945,300 | 895,600 | 860,700 | 895,700 | 934,200 | 900,900 | 928,300 | 1,002,100 | 1,118,800 | 982,600 | 907,000 | 836,100 | 886,300 | 805,900 | 735,400 | 699,100 |
| Cash ratio | 0.31 | 0.30 | 0.27 | 0.34 | 0.38 | 0.38 | 0.48 | 0.55 | 0.52 | 0.46 | 0.49 | 0.58 | 0.56 | 0.70 | 0.64 | 0.80 | 0.78 | 0.63 | 0.77 | 0.79 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($239,600K
+ $36,500K)
÷ $897,200K
= 0.31
The cash ratio of Smith AO Corporation has shown fluctuations over the past few years, ranging from 0.27 to 0.80. This 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 meet short-term obligations using readily available funds.
The company's cash ratio was relatively stable around the mid-range levels until the end of 2021, after which it started to decline. The dip in the cash ratio from 0.80 in March 2021 to 0.38 in December 2023 and remaining around that level indicates a decreasing ability of Smith AO Corporation to cover its short-term liabilities solely with cash on hand.
While a declining cash ratio may raise concerns about liquidity risk, it is essential to assess this ratio alongside other liquidity ratios and the company's overall financial health to gain a comprehensive understanding of its liquidity position. Management should closely monitor the trend in the cash ratio and take necessary actions to ensure the company maintains an appropriate level of liquidity to meet its short-term obligations.
Peer comparison
Dec 31, 2024