Carter’s Inc (CRI)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	351,213	211,748	984,294	1,102,320	214,311
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	511,862	528,949	717,231	792,532	475,500
Cash ratio		0.69	0.40	1.37	1.39	0.45

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($351,213K + $—K) ÷ $511,862K
= 0.69

The cash ratio measures the ability of a company to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external financing.

Analyzing the cash ratio of Carter’s Inc over the past five years, we observe fluctuations in the ratio. In 2023, the cash ratio increased to 0.69 from 0.40 in 2022, indicating an improvement in the company's short-term liquidity position. However, compared to the ratios of 2021 and 2020 which were 1.37 and 1.39 respectively, the current ratio is lower, suggesting a potential decrease in the company's ability to cover short-term obligations purely from cash and cash equivalents.

It is worth noting that the cash ratio in 2019 was 0.45, reflecting lower liquidity compared to the most recent years. This indicates that Carter’s Inc has made significant improvements in its ability to cover short-term liabilities with cash over the past few years.

Overall, although the cash ratio has varied over time, with both improvements and declines, the current ratio of 0.69 suggests that the company has a moderate ability to meet short-term obligations using its available cash resources. Further analysis of the company's overall financial health and liquidity position would provide a more comprehensive assessment of its short-term stability.