Amphenol Corporation (APH)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 3,317,000 | 1,475,000 | 1,373,100 | 1,197,100 | 1,702,000 |
| Short-term investments | US$ in thousands | 18,400 | 185,200 | 61,100 | 44,300 | 36,100 |
| Total current liabilities | US$ in thousands | 4,083,800 | 3,152,700 | 2,676,100 | 2,447,100 | 2,304,300 |
| Cash ratio | 0.82 | 0.53 | 0.54 | 0.51 | 0.75 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,317,000K
+ $18,400K)
÷ $4,083,800K
= 0.82
The cash ratio of Amphenol Corporation has fluctuated over the past five years. In December 31, 2020, the cash ratio was 0.75, indicating that the company had $0.75 in cash and near-cash assets for every $1 of current liabilities. However, in the subsequent years, the cash ratio decreased to 0.51 in 2021 and 0.54 in 2022, suggesting a decrease in the company's ability to cover its short-term obligations with its cash reserves.
In December 31, 2023 and December 31, 2024, the cash ratio remained relatively stable at 0.53 and 0.82, respectively. While the ratio in 2023 indicates that the company improved its liquidity position compared to the previous years, the substantial increase to 0.82 in 2024 implies that Amphenol Corporation significantly bolstered its cash reserves relative to its current liabilities, potentially enhancing its ability to meet short-term financial obligations more comfortably.
Overall, the downward trend followed by an improvement in the cash ratio suggests that Amphenol Corporation may have faced liquidity challenges initially but subsequently took actions to enhance its liquidity position and financial flexibility. Investors and creditors may view the increasing cash ratio positively as it indicates a strengthened ability to meet its short-term obligations.