Axalta Coating Systems Ltd (AXTA)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 699,800 | 645,200 | 840,600 | 1,360,900 | 1,017,500 |
| Short-term investments | US$ in thousands | — | 2,300 | — | 1,700 | 1,600 |
| Total current liabilities | US$ in thousands | 1,427,500 | 1,384,700 | 1,334,900 | 1,180,900 | 1,072,900 |
| Cash ratio | 0.49 | 0.47 | 0.63 | 1.15 | 0.95 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($699,800K
+ $—K)
÷ $1,427,500K
= 0.49
The cash ratio of Axalta Coating Systems Ltd has shown a declining trend over the past five years. The ratio has decreased from 1.07 in 2019 to 0.57 in both 2022 and 2023. This downward trend indicates a decreasing ability of the company to cover its short-term liabilities solely with its cash and cash equivalents.
The ratio was highest in 2020 at 1.26, indicating the company had sufficient cash to cover its short-term obligations. However, the subsequent decrease in the ratio suggests a reduction in the liquidity position of the company.
A cash ratio of less than 1 may indicate potential liquidity issues for the company, as it may not have enough liquid assets to meet its short-term obligations. Investors and creditors may view a declining cash ratio as a cause for concern, as it could signal a potential inability to meet immediate financial obligations. It would be important for Axalta Coating Systems Ltd to monitor and potentially improve its cash management practices to ensure adequate liquidity in the future.
Peer comparison
Dec 31, 2023