American Axle & Manufacturing (AXL)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 519,900 | 511,500 | 530,200 | 557,000 | 532,000 |
| Short-term investments | US$ in thousands | — | 2,400 | 1,900 | 4,900 | 900 |
| Total current liabilities | US$ in thousands | 1,201,600 | 1,199,300 | 1,039,900 | 979,300 | 1,026,400 |
| Cash ratio | 0.43 | 0.43 | 0.51 | 0.57 | 0.52 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($519,900K
+ $—K)
÷ $1,201,600K
= 0.43
American Axle & Manufacturing Holdings Inc's cash ratio has been relatively stable over the past five years, ranging from 0.59 to 0.78. The cash ratio measures a 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 without relying on external sources of funding.
In this case, the downward trend in the cash ratio from 0.78 in 2020 to 0.59 in 2023 may raise some concerns about the company's liquidity position. A decreasing cash ratio could suggest that American Axle & Manufacturing Holdings Inc may be facing challenges in maintaining sufficient cash reserves relative to its short-term liabilities.
However, it is important to consider other liquidity ratios and factors such as operating cash flows, working capital management, and overall financial health before making definitive conclusions about the company's liquidity position. Further analysis beyond just the cash ratio is necessary to fully assess American Axle & Manufacturing Holdings Inc's financial stability and ability to meet its short-term obligations.
Peer comparison
Dec 31, 2023