BorgWarner Inc (BWA)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 2,094,000 | 1,534,000 | 1,333,000 | 1,841,000 | 1,650,000 |
| Short-term investments | US$ in thousands | — | 56,000 | 87,000 | — | 820,000 |
| Total current liabilities | US$ in thousands | 3,646,000 | 3,767,000 | 4,236,000 | 3,798,000 | 3,810,000 |
| Cash ratio | 0.57 | 0.42 | 0.34 | 0.48 | 0.65 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,094,000K
+ $—K)
÷ $3,646,000K
= 0.57
The cash ratio of BorgWarner Inc has shown some fluctuations over the years. As of December 31, 2020, the cash ratio was 0.65, indicating that the company had $0.65 in cash and cash equivalents for every $1 of current liabilities. This suggests a strong liquidity position at that time.
However, by December 31, 2021, the cash ratio had declined to 0.48, signaling a decrease in the company's ability to cover its short-term obligations with its available cash. This could be a cause for concern as it may indicate a potential strain on liquidity.
The trend continued into December 31, 2022, where the cash ratio further decreased to 0.34. This significant drop may raise red flags about BorgWarner Inc's liquidity management and its ability to meet its immediate financial obligations.
By December 31, 2023, there was a slight improvement in the cash ratio to 0.42, but it still remained lower compared to previous years. This indicates that the company may have made some efforts to enhance its cash position, but challenges in liquidity management may still persist.
Finally, as of December 31, 2024, the cash ratio increased to 0.57, showing a positive trend towards better liquidity. However, it is essential for BorgWarner Inc to closely monitor and manage its cash reserves to ensure they are sufficient to meet short-term financial obligations consistently.
In summary, the cash ratio of BorgWarner Inc has fluctuated over the years, highlighting the importance of maintaining a healthy cash position to safeguard against liquidity risks and ensure the company's financial stability.
Peer comparison
Dec 31, 2024