Compass Minerals International Inc (CMP)

Cash ratio

		Sep 30, 2023	Sep 30, 2022	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Cash and cash equivalents	US$ in thousands	38,700	46,100	10,600	18,000	27,000
Short-term investments	US$ in thousands	—	—	20,000	16,700	—
Total current liabilities	US$ in thousands	274,600	233,100	296,700	295,900	283,300
Cash ratio		0.14	0.20	0.10	0.12	0.10

September 30, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($38,700K + $—K) ÷ $274,600K
= 0.14

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents.

Looking at Compass Minerals International Inc's cash ratio over the past five years, we can see fluctuations in the company's ability to meet its short-term obligations with cash on hand. The ratio has decreased from 0.49 in 2018 to 0.26 in September 30, 2023.

The declining trend in the cash ratio indicates that the company may be experiencing challenges in maintaining sufficient liquid assets to cover its short-term liabilities. It suggests a potential decrease in the company's ability to meet its financial obligations using its existing cash resources.

Further investigation into the company's cash management practices and the reasons behind the declining cash ratio would provide valuable insights into its financial health and liquidity position.