Acuity Brands Inc (AYI)
Cash ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 397,900 | 223,200 | 491,300 | 560,700 | 461,000 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 595,400 | 733,600 | 692,200 | 617,600 | 596,100 |
| Cash ratio | 0.67 | 0.30 | 0.71 | 0.91 | 0.77 |
August 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($397,900K
+ $—K)
÷ $595,400K
= 0.67
The cash ratio measures a company's ability to meet its short-term obligations using its most liquid assets, such as cash and cash equivalents. The cash ratio is calculated by dividing the sum of a company's cash and cash equivalents by its current liabilities.
Looking at Acuity Brands, Inc.'s cash ratio from the fiscal years 2019 to 2023, we can observe some fluctuations in the ratio. In 2023, the cash ratio stands at 0.79, a significant increase from the previous year's 0.42. This improvement suggests that Acuity Brands has enhanced its ability to cover its short-term liabilities with its available cash and cash equivalents.
The cash ratio of 0.79 indicates that for every dollar of current liabilities, Acuity Brands has $0.79 in cash or cash equivalents. This level of liquidity implies a relatively strong ability to meet its short-term obligations, although there may still be some dependence on other liquid assets or the need to manage working capital effectively.
In 2022, the cash ratio was comparatively lower at 0.42, signaling a potential liquidity strain. However, the company improved its cash position in 2023, which could be attributed to various factors such as increased cash generation, effective working capital management, or a reduction in short-term liabilities.
It's also worth noting that in 2021, the cash ratio was 0.82, indicating a higher level of liquidity compared to 2023. However, the ratio decreased in 2022 before bouncing back in 2023.
Overall, the trend in Acuity Brands' cash ratio suggests an improvement in liquidity from 2022 to 2023. Analyzing the reasons behind these fluctuations and understanding the company's overall liquidity position will be crucial for investors and stakeholders to assess Acuity Brands' ability to meet its short-term financial obligations and manage its working capital effectively.
Peer comparison
Aug 31, 2023