AutoZone Inc (AZO)

Cash ratio

		Aug 31, 2024	May 4, 2024	Feb 10, 2024	Nov 18, 2023	Aug 26, 2023	May 6, 2023	Feb 11, 2023	Nov 19, 2022	Aug 27, 2022	May 7, 2022	Feb 12, 2022	Nov 20, 2021	Aug 28, 2021	May 8, 2021	Feb 13, 2021	Nov 21, 2020	Aug 29, 2020	May 9, 2020	Nov 23, 2019	Aug 31, 2019
Cash and cash equivalents	US$ in thousands	298,172	275,358	304,096	282,981	277,054	274,916	301,286	269,790	264,380	263,044	239,423	961,125	1,171,340	975,646	1,026,160	1,664,000	1,750,820	509,118	158,089	176,300
Short-term investments	US$ in thousands	38,431	—	—	—	39,639	—	—	—	49,768	—	—	55,520	46,007	—	—	41,279	76,118	—	52,365	67,958
Total current liabilities	US$ in thousands	8,714,240	9,192,590	8,772,610	8,785,620	8,511,860	8,464,950	8,614,620	8,708,990	8,588,390	8,064,080	7,684,640	8,087,890	7,369,750	7,013,250	6,804,270	6,456,700	6,283,090	5,769,080	5,868,240	5,512,140
Cash ratio		0.04	0.03	0.03	0.03	0.04	0.03	0.03	0.03	0.04	0.03	0.03	0.13	0.17	0.14	0.15	0.26	0.29	0.09	0.04	0.04

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 shown fluctuations over the past few years, ranging from 0.03 to 0.29. The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external financing.

AutoZone's cash ratio has generally been in the range of 0.03 to 0.04, indicating that the company may have had limited cash reserves relative to its short-term liabilities during those periods. However, there were instances where the cash ratio spiked significantly, such as in February 2022 and August 2021 when the ratio was 0.13 and 0.17 respectively. These spikes suggest that AutoZone had relatively higher cash reserves in those periods compared to its short-term liabilities.

The cash ratio of 0.29 in November 2019 was notably higher, indicating a strong liquidity position for AutoZone at that time. It means the company had a higher proportion of cash to cover its short-term obligations, which is a positive sign for financial stability.

Overall, while the cash ratio of AutoZone Inc has varied, it is essential to consider the company's overall financial health and cash management strategies in conjunction with this ratio to gain a comprehensive understanding of its liquidity position.