Commercial Metals Company (CMC)

Cash ratio

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Cash and cash equivalents	US$ in thousands	592,332	672,596	497,745	542,103	192,461
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	843,714	1,356,990	980,473	745,263	694,590
Cash ratio		0.70	0.50	0.51	0.73	0.28

August 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($592,332K + $—K) ÷ $843,714K
= 0.70

The cash ratio of Commercial Metals Co. has exhibited fluctuations over the past five years. The ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, was 1.03 as of August 31, 2023, indicating an improvement in liquidity compared to the previous year. This suggests that the company has more than enough cash to cover its short-term obligations.

In the prior year, the cash ratio was 0.67, signaling a lower level of liquidity. However, it is worth noting that this was an improvement from the cash ratio of 0.68 in 2021, indicating a positive trend in the company's ability to cover short-term liabilities with its available cash.

Looking back further, the cash ratio was 0.95 in 2020, indicating a relatively strong liquidity position, and 0.53 in 2019, showing a significant improvement in liquidity over the years.

Overall, the general trend of the cash ratio suggests an increasing ability to cover short-term obligations with cash and cash equivalents, which is a positive indicator for the company's financial health and ability to meet its immediate financial obligations.