Chemed Corp (CHE)

Cash ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash and cash equivalents US$ in thousands 263,958 74,126 32,895 162,675 6,158
Short-term investments US$ in thousands — — — 88,811 —
Total current liabilities US$ in thousands 312,050 297,205 302,399 299,108 262,220
Cash ratio 0.85 0.25 0.11 0.84 0.02

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($263,958K + $—K) ÷ $312,050K
= 0.85

The cash ratio of Chemed Corp. has shown fluctuations over the last five years, ranging from 0.15 in 2019 to 0.98 in 2023. This ratio indicates the company's ability to cover its short-term liabilities with cash and cash equivalents on hand. A higher cash ratio implies a greater ability to cover short-term obligations without relying on external sources of financing.

In 2019, Chemed Corp. had a relatively low cash ratio of 0.15, suggesting a limited ability to cover short-term liabilities with its cash reserves. However, this ratio improved significantly in the following years, reaching 0.98 in 2023, indicating a strong liquidity position.

The increasing trend in the cash ratio from 2019 to 2023 suggests that Chemed Corp. has been effectively managing its cash resources and improving its liquidity position over time. This signals a positive financial health and the ability to meet its short-term obligations without facing liquidity issues.

Overall, the cash ratio analysis indicates that Chemed Corp. has made significant improvements in its liquidity position in recent years, which is a positive sign for the company's financial stability and ability to navigate short-term financial challenges.