Avanos Medical Inc (AVNS)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 107,700 | 87,700 | 127,700 | 118,500 | 111,500 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 165,900 | 234,600 | 185,800 | 139,200 | 166,300 |
| Cash ratio | 0.65 | 0.37 | 0.69 | 0.85 | 0.67 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($107,700K
+ $—K)
÷ $165,900K
= 0.65
The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. Analyzing the cash ratio of Avanos Medical Inc over the years reveals fluctuations in its liquidity position.
- As of December 31, 2020, the cash ratio was 0.67, indicating that Avanos had $0.67 in cash and cash equivalents for every dollar of current liabilities. This suggested a moderate liquidity position at the end of 2020.
- By December 31, 2021, the cash ratio improved to 0.85, reflecting an increase in available cash relative to short-term obligations. This signaled a stronger liquidity position for Avanos compared to the previous year.
- However, by December 31, 2022, the cash ratio decreased to 0.69, indicating a slight decline in liquidity compared to the prior year but still at a reasonable level.
- A significant drop in the cash ratio was observed by December 31, 2023, where it fell sharply to 0.37. This decrease may raise concerns about Avanos's ability to meet its short-term liabilities with available cash during that period.
- The cash ratio slightly recovered by December 31, 2024, reaching 0.65. Although it improved compared to the previous year, the ratio remained lower than the levels seen in 2021 and 2022.
Overall, fluctuations in the cash ratio of Avanos Medical Inc suggest varying levels of liquidity over the years, with improvements in some periods and declines in others. Monitoring this ratio can provide insights into the company's short-term financial health and ability to manage its obligations effectively.
Peer comparison
Dec 31, 2024