Colgate-Palmolive Company (CL)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	1,096,000	966,000	775,000	832,000	888,000
Short-term investments	US$ in thousands	160,000	179,000	175,000	34,000	37,000
Total current liabilities	US$ in thousands	5,759,000	4,741,000	4,004,000	4,051,000	4,404,000
Cash ratio		0.22	0.24	0.24	0.21	0.21

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,096,000K + $160,000K) ÷ $5,759,000K
= 0.22

The cash ratio of Colgate-Palmolive Company has shown a relatively stable trend over the past five years. As of December 31, 2020 and December 31, 2021, the cash ratio was recorded at 0.21, indicating that for every dollar of current liabilities, the company had $0.21 of cash and cash equivalents available to cover its short-term obligations.

There was a slight increase in the cash ratio to 0.24 as of December 31, 2022 and December 31, 2023, suggesting an improvement in the company's liquidity position. This implies that Colgate-Palmolive had a higher level of liquid assets relative to its current liabilities during those periods.

However, the cash ratio decreased to 0.22 as of December 31, 2024. While this decline may raise concerns about the company's ability to cover its short-term obligations with available cash, the ratio remains above 0.20, indicating that Colgate-Palmolive still has a reasonable level of liquidity to meet its current commitments.

Overall, the cash ratio analysis suggests that Colgate-Palmolive has maintained a prudent level of liquidity over the years, although the slight fluctuations in the ratio highlight the importance of closely monitoring the company's cash position and short-term solvency.