Constellation Energy Corp (CEG)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 368,000 | 422,000 | 504,000 |
| Short-term investments | US$ in thousands | — | -14,114,000 | 43,000 |
| Total current liabilities | US$ in thousands | 6,319,000 | 7,839,000 | 7,996,000 |
| Cash ratio | 0.06 | -1.75 | 0.07 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($368,000K
+ $—K)
÷ $6,319,000K
= 0.06
The cash ratio of Constellation Energy Corporation has shown some fluctuations over the past four years. The cash ratio measures the company's ability to cover its short-term liabilities using its cash and cash equivalents.
In 2023, the cash ratio improved to 0.61 from 0.57 in 2022. This indicates that the company had $0.61 in cash and cash equivalents for every dollar of its short-term liabilities at the end of 2023.
Comparing this to the previous years, the slightly increasing trend in the cash ratio from 2021 to 2023 suggests an enhanced ability to meet short-term obligations with liquid assets. Despite a small dip in 2022, the overall stability in the cash ratio indicates efficient management of cash resources by Constellation Energy Corporation.
However, it is important to note that while a higher cash ratio is generally preferred as it signifies better liquidity and ability to meet short-term obligations, an excessively high cash ratio could also indicate underutilization of cash and missed investment opportunities.
Therefore, Constellation Energy Corporation's cash ratio, although fluctuating, reflects a consistent ability to cover its short-term liabilities with cash and cash equivalents, which is crucial for financial stability and operational flexibility.
Peer comparison
Dec 31, 2023