Topbuild Corp (BLD)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 848,565 | 240,069 | 139,779 | 330,007 | 184,807 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 771,538 | 789,639 | 733,426 | 496,477 | 476,754 |
| Cash ratio | 1.10 | 0.30 | 0.19 | 0.66 | 0.39 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($848,565K
+ $—K)
÷ $771,538K
= 1.10
The cash ratio of TopBuild Corp has shown variability over the past five years, ranging from 0.23 to 1.15. In 2023, the cash ratio improved significantly to 1.15, indicating that the company had $1.15 in cash for every $1 of current liabilities. This suggests that TopBuild Corp had a strong ability to cover its short-term obligations using its cash reserves at the end of 2023.
Comparing this to previous years, the cash ratio was below 1 in 2022 and 2021, indicating that the company had less cash on hand relative to its current liabilities during those years. However, the ratio increased to 0.70 in 2020 and 0.42 in 2019, showing improvements in the company's liquidity position over time.
Overall, a higher cash ratio signifies a more favorable liquidity position for TopBuild Corp, indicating the company's ability to meet its short-term obligations with ease. The increasing trend in the cash ratio in recent years suggests improved liquidity management by the company, which can provide a cushion against unexpected financial challenges.