Colgate-Palmolive Company (CL)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	966,000	775,000	832,000	888,000	883,000
Short-term investments	US$ in thousands	179,000	175,000	34,000	37,000	23,000
Total current liabilities	US$ in thousands	4,741,000	4,004,000	4,051,000	4,404,000	4,038,000
Cash ratio		0.24	0.24	0.21	0.21	0.22

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($966,000K + $179,000K) ÷ $4,741,000K
= 0.24

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet current obligations without relying on external sources of funding.

For Colgate-Palmolive Co., the cash ratio has been relatively stable over the past five years. The ratio ranged from 0.32 to 0.38, with the highest value of 0.38 in 2022. This indicates that the company had 37 cents (in 2023) of cash and cash equivalents for every dollar of short-term liabilities, which suggests a moderate ability to fulfill its immediate financial obligations using available liquid assets.

Overall, Colgate-Palmolive Co. has maintained a consistent level of liquidity over the years, providing a cushion against short-term financial challenges. However, it is essential for the company to continue monitoring its cash position and manage its working capital efficiently to ensure liquidity remains at an optimal level.