BorgWarner Inc (BWA)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,534,000 | 1,333,000 | 1,841,000 | 1,650,000 | 832,000 |
| Short-term investments | US$ in thousands | 56,000 | 87,000 | — | 820,000 | — |
| Total current liabilities | US$ in thousands | 3,767,000 | 4,236,000 | 3,798,000 | 3,810,000 | 2,329,000 |
| Cash ratio | 0.42 | 0.34 | 0.48 | 0.65 | 0.36 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,534,000K
+ $56,000K)
÷ $3,767,000K
= 0.42
The cash ratio of BorgWarner Inc has fluctuated over the past five years, ranging from 0.38 to 0.58. The cash ratio measures the company's ability to cover its short-term liabilities with cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.
In 2021, the cash ratio was 0.58, suggesting that BorgWarner had a relatively higher level of cash compared to its short-term liabilities. This indicates a healthy liquidity position for the company at that time. However, in 2022, the cash ratio decreased to 0.38, indicating a lower level of cash reserves relative to short-term liabilities, which may have raised concerns about the company's ability to meet its short-term obligations.
In the most recent year (2023), the cash ratio increased to 0.48, showing an improvement in BorgWarner's liquidity position compared to the previous year. It is important for investors and analysts to closely monitor the cash ratio trend over time to assess BorgWarner's ability to manage its short-term financial obligations effectively.
Peer comparison
Dec 31, 2023