ChampionX Corporation (CHX)

Cash ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash and cash equivalents US$ in thousands 288,557 250,187 251,678 201,421 35,290
Short-term investments US$ in thousands 72,323
Total current liabilities US$ in thousands 782,749 858,976 802,325 622,560 199,681
Cash ratio 0.46 0.29 0.31 0.32 0.18

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($288,557K + $72,323K) ÷ $782,749K
= 0.46

The cash ratio of ChampionX Corp. has fluctuated over the past five years, ranging from 0.31 to 0.45. The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio implies a stronger ability to meet short-term obligations without relying on external sources of funding.

In this case, ChampionX Corp.'s cash ratio has generally been above 0.4, indicating that the company has had a relatively solid ability to cover its short-term liabilities with its available cash reserves. The increasing trend from 2019 to 2023 suggests an improvement in the company's liquidity position over the years.

However, it is essential to consider the industry norms and the company's specific circumstances when interpreting the cash ratio. While a high cash ratio can provide a sense of security, excessively high levels of cash holdings may also indicate inefficient use of resources. Overall, ChampionX Corp.'s cash ratio trend showcases a positive liquidity position, but further analysis is recommended to gain a comprehensive understanding of the company's financial health.


Peer comparison

Dec 31, 2023

Company name
Symbol
Cash ratio
ChampionX Corporation
CHX
0.46
Dover Corporation
DOV
0.17