Clean Harbors Inc (CLH)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 687,192 | 444,698 | 492,603 | 452,575 | 519,101 |
| Short-term investments | US$ in thousands | 102,634 | 106,101 | 62,033 | 81,724 | 51,857 |
| Total current liabilities | US$ in thousands | 1,102,670 | 1,037,540 | 1,020,090 | 925,314 | 636,145 |
| Cash ratio | 0.72 | 0.53 | 0.54 | 0.58 | 0.90 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($687,192K
+ $102,634K)
÷ $1,102,670K
= 0.72
The cash ratio of Clean Harbors Inc has exhibited a decreasing trend from 0.90 as of December 31, 2020, to 0.58 as of December 31, 2021. This downward movement continued into the following years, with the ratio declining further to 0.54 as of December 31, 2022, and to 0.53 as of December 31, 2023. However, there was a slight improvement in the cash ratio by December 31, 2024, reaching 0.72.
The cash ratio measures a company's ability to cover its short-term liabilities solely with its available cash and cash equivalents. A higher ratio indicates a stronger ability to meet short-term obligations without relying on external financing or liquidating other assets. The decreasing trend in Clean Harbors Inc's cash ratio may signal potential liquidity challenges or a shift in the company's cash management strategy during the analyzed period.
It is important for stakeholders to closely monitor the cash ratio alongside other liquidity metrics to assess the company's financial health and ability to withstand short-term financial pressures. Management should continue to evaluate and optimize cash management practices to maintain adequate liquidity levels for operational needs and potential contingencies.