AutoZone Inc (AZO)

Cash ratio

		Aug 31, 2024	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020
Cash and cash equivalents	US$ in thousands	298,172	277,054	264,380	1,171,340	1,750,820
Short-term investments	US$ in thousands	38,431	39,639	49,768	46,007	76,118
Total current liabilities	US$ in thousands	8,714,240	8,511,860	8,588,390	7,369,750	6,283,090
Cash ratio		0.04	0.04	0.04	0.17	0.29

August 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($298,172K + $38,431K) ÷ $8,714,240K
= 0.04

The cash ratio of AutoZone Inc has been relatively stable over the past five years, ranging from 0.04 to 0.29. This ratio indicates the company's ability to cover its current liabilities with its cash and cash equivalents. A cash ratio of 0.04 implies that for every dollar of current liabilities, AutoZone had $0.04 in cash and cash equivalents on hand in both 2024 and 2023. This suggests a relatively lower liquidity position compared to the previous years. However, in 2022 there was a notable decrease in liquidity with a cash ratio of 0.04, indicating a tighter ability to cover current liabilities.

The significant improvement in 2021, with a cash ratio of 0.17, could imply a stronger liquidity position, suggesting that AutoZone had more cash on hand relative to its current liabilities. This improvement continued in 2020, with a cash ratio of 0.29, indicating even greater liquidity.

Overall, AutoZone's cash ratio has shown some fluctuations in recent years, with lower liquidity in 2022, followed by a notable improvement in 2021 and 2020. Investors and analysts may want to further investigate the reasons behind these fluctuations to assess the company's overall financial health and liquidity management.