Air Products and Chemicals Inc (APD)

Cash ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cash and cash equivalents	US$ in thousands	2,979,700	1,617,000	2,711,000	4,468,900	5,253,000
Short-term investments	US$ in thousands	5,000	332,200	590,700	1,331,900	1,104,900
Total current liabilities	US$ in thousands	4,179,600	3,895,800	3,465,800	2,799,100	2,416,700
Cash ratio		0.71	0.50	0.95	2.07	2.63

September 30, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,979,700K + $5,000K) ÷ $4,179,600K
= 0.71

The cash ratio of Air Products and Chemicals Inc has shown a declining trend over the past five years. In Sep 2020, the cash ratio was the highest at 2.63, indicating the company had more than enough cash to cover its current liabilities. However, in the following years, the cash ratio decreased significantly to 2.07 in Sep 2021, 0.95 in Sep 2022, and further down to 0.50 in Sep 2023.

As of Sep 2024, the cash ratio stands at 0.71, which suggests that the company may have challenges in meeting its short-term obligations with its available cash and cash equivalents. This declining trend in the cash ratio may indicate potential liquidity issues for the company, as it has become more reliant on other sources of liquidity aside from cash to meet its current liabilities.

It's crucial for Air Products and Chemicals Inc to carefully monitor and manage its liquidity position to ensure it can meet its short-term financial obligations efficiently. Management may need to evaluate their cash management practices, working capital efficiency, and overall liquidity position to address this downward trend in the cash ratio. Furthermore, investors and stakeholders should also closely monitor the company's liquidity position to assess the risks associated with its ability to meet its short-term obligations.