CAVA Group, Inc. (CAVA)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 366,120 | 332,428 | 39,125 | 140,332 | 394,300 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 132,636 | 109,036 | 84,318 | 51,725 | 108,300 |
| Cash ratio | 2.76 | 3.05 | 0.46 | 2.71 | 3.64 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($366,120K
+ $—K)
÷ $132,636K
= 2.76
The cash ratio of CAVA Group, Inc. demonstrates notable variations over the specified period, reflecting evolving liquidity positions at year-end dates from 2020 to 2024.
At December 31, 2020, the cash ratio stood at 3.64, indicating a strong liquidity position where the company's cash and cash equivalents exceeded its current liabilities. This high ratio suggests that CAVA had ample liquidity, allowing it to meet its short-term obligations with relative ease.
By December 31, 2021, the cash ratio declined to 2.71, representing a substantial decrease from the prior year. Although still indicating a robust liquidity cushion, this reduction could suggest increased utilization of cash for operational needs, investments, or other purposes, or slight shifts in the current liabilities.
The most significant change occurred by December 31, 2022, when the cash ratio markedly dropped to 0.46. This sharp decrease suggests a considerable reduction in cash holdings relative to current liabilities, raising concerns about the company's immediate liquidity position. Such a low ratio indicates that cash and cash equivalents cover less than half of the current liabilities, potentially signaling increased liquidity risk or a strategic shift in working capital management.
In the subsequent years, the cash ratio exhibited a recovery trend, rising to 3.05 by December 31, 2023, and further to 2.76 by December 31, 2024. These increases imply an improvement in liquidity, with cash reserves once again surpassing short-term obligations comfortably. The prior year's high ratio indicates restored liquidity strength, though it remains below the 2020 peak, reflecting the fluctuations experienced during this period.
Overall, the cash ratio trends reveal periods of significant liquidity fluctuations, including a notable dip in 2022 followed by recovery in subsequent years. The variability underscores shifts in the company's cash management, operational cash flows, or short-term liabilities. Maintaining a strong cash ratio is crucial for financial stability, and although CAVA Group, Inc. experienced a temporary liquidity concern in 2022, recent figures suggest an improved liquidity outlook.
Peer comparison
Dec 31, 2024