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