Builders FirstSource Inc (BLDR)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	66,156	80,445	42,603	423,806	14,096
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	1,863,440	1,842,780	2,128,710	1,074,850	821,301
Cash ratio		0.04	0.04	0.02	0.39	0.02

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($66,156K + $—K) ÷ $1,863,440K
= 0.04

The cash ratio of Builders Firstsource Inc has fluctuated over the past five years, ranging from 0.06 to 0.45. The cash ratio measures the company's ability to cover its short-term liabilities with its available cash and cash equivalents.

In 2020, the cash ratio was highest at 0.45, indicating that the company had a significant amount of cash on hand to cover its short-term obligations. However, this ratio decreased in 2021 to 0.18 and further to 0.19 in 2023, suggesting a lower level of liquidity compared to the prior year.

The decreasing trend in the cash ratio from 2020 to 2023 may raise concerns about the company's ability to meet its short-term obligations solely with cash reserves. It is essential for the company to maintain a balance between cash on hand and other investments to ensure financial stability and liquidity in the long term.