Copart Inc (CPRT)

Cash ratio

		Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Cash and cash equivalents	US$ in thousands	1,514,110	957,395	1,384,240	1,048,260	477,718
Short-term investments	US$ in thousands	1,908,050	1,406,590	—	—	—
Total current liabilities	US$ in thousands	628,567	492,769	440,889	421,031	356,044
Cash ratio		5.44	4.80	3.14	2.49	1.34

July 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,514,110K + $1,908,050K) ÷ $628,567K
= 5.44

The cash ratio of Copart Inc has shown a consistent upward trend over the last five years, indicating an improvement in the company's liquidity position. The ratio has more than quadrupled from 1.34 in July 2020 to 5.44 in July 2024. This suggests that Copart Inc has significantly increased its ability to cover its short-term obligations with cash and cash equivalents.

The steady increase in the cash ratio reflects a positive trend in Copart Inc's liquidity management and financial health. The company's cash reserves relative to its current liabilities have strengthened over the years, providing a buffer against unforeseen financial challenges. A high cash ratio indicates that Copart Inc has sufficient liquid assets to meet its short-term obligations without relying heavily on borrowing or selling other assets.

Overall, the upward movement in Copart Inc's cash ratio demonstrates a prudent approach to managing liquidity and indicates a strong financial position that may enhance the company's ability to navigate uncertainties and capitalize on opportunities in the future.